Israeli safety forces in entrance of a constructing hit by Iranian missiles within the Holon space close to Tel Aviv. Oil and pure fuel costs surged on the outset of the battle, prompting fears of extended inflation. [AP]
The depth and length of the Israel-Iran battle might be important in figuring out its influence on the Greek financial system, economists warn, citing dangers of stagflation and broader geopolitical instability.
Financial institution of Greece Governor Yannis Stournaras highlights potential stagflationary results – greater inflation paired with slower development – as key issues.
Oil and pure fuel costs surged on the outset of the battle, prompting fears of extended inflation. Whereas Brent crude has since eased to $76.92 a barrel, gasoline costs in Greece have already risen, and a possible closure of the Strait of Hormuz – very important for 20% of worldwide oil shipments – stays a significant menace.
Power market disruptions may double their influence on inflation and development if sustained for six months, Stournaras notes.
Nationwide Financial system and Finance Minister Kyriakos Pierrakakis stated Greece enters this disaster from a place of elevated resilience, citing sturdy fiscal efficiency, credit score upgrades, and falling debt ranges. Nonetheless, he warned that deeper escalation may have international penalties, with no financial system left untouched.
Past power, analysts level to heightened uncertainty affecting commerce, transport, and funding. Nikos Vettas, the Common Director of the Basis for Financial and Industrial Analysis (ΙΟΒΕ) and a Professor of Economics on the Athens College of Economics and Enterprise, notes that uncertainty is weighing on financing prices and capital markets, with implications for overseas direct funding – very important for Greece’s development momentum.
Transport can also be in danger, particularly deep-sea commerce routes between Asia and Europe. Disruptions may drive commodity costs greater and delay provide chains.
The outlook for tourism, a key sector, is one other concern: over a million Israeli vacationers had been anticipated to journey to Greece in 2025, up from 620,000 in 2024, producing revenues of €400 million. The broader decline in regional stability may considerably have an effect on arrivals and revenues.
Eurobank chief economist Tasos Anastasatos notes that whereas escalation may harm commerce, funding, and inflation, a de-escalation may benefit Greece, positioning it as a comparatively secure vacation spot.
