Economic activity gained momentum in Q2:2025, with GDP expanding by 0.6% in seasonally adjusted q-o-q terms, up from 0.1% q-o-q in Q1, achieving the fifth-highest quarterly growth rate in the euro area.
The slowdown in annual GDP growth to 1.7% in Q2:2025 largely reflects adverse base effects from the exceptionally strong pace of inventory accumulation in Q2:2024.
Gross fixed capital formation rebounded strongly, increasing by 6.5% y-o-y to a 15-year high of 16.6% of GDP, on the back of widespread increases across investment components, and especially construction.
Construction is poised to strengthen further, as indicated by a turnaround in building permit issuance, in May, and a surge in sectoral confidence at a 25-year high in August.
Private consumption increased by, a still respectable, 1.1% y-o-y, down from 1.8% y-o-y in Q1:2025 and 2.0% in FY:2024, with the accelerating spending on services by residents offsetting the slowing in consumption of goods.
Total labor compensation was up by 6.2% y-o-y in Q2 surpassing pre-crisis highs of 2009 in nominal terms, though still 10% lower in CPI-adjusted terms. Strong labor market conditions, rising non-labor income and the recently announced reduction in personal income tax rates, in conjunction with slowing inflation, are going to support private consumption in H2:2025 as well as in 2026.
Business profits and non-labor income from entrepreneurial activity rebounded by 6.1% y-o-y, indicating favorable demand conditions.
Net exports added 2.2 pps to Q2 growth − the largest contribution in four years – due to rising services and non-fuel goods exports and a significant moderation in non-fuel imports.
Most notably, non-fuel exports increased by an upbeat 7.6% y-o-y in Q2, in constant price terms. However, a sharp decline in fuel exports (-36% y-o-y in constant prices) led to a 1.1% drop in total goods exports.
The NBG nowcasting model estimates, incorporating the latest information from leading and conjunctural indicators, available for July-August, point to accelerating GDP growth, in y-o-y terms, to 2.2% in Q3:2025 with q-o-q growth at 0.7% in this quarter.