Greece is on track to lose its status as the euro zone's most indebted country by the end of this year, as its public debt is forecast to fall below Italy's, according to sources and Italian budget data. Greece's debt-to-GDP ratio is expected to drop to around 137 per cent in 2026, down from 145.9 per cent in 2025, two senior officials told Reuters. Meanwhile, Italy's debt is projected to peak at 138.6 per cent in 2026, up from 137.1 per cent in 2025, as outlined in the Treasury's multi-year budget plan.
Both officials, speaking anonymously, confirmed that Greece would cease to be the euro zone's most indebted nation from this year. The new estimate for Greece's debt ratio will be included in its multi-year fiscal plan, to be submitted to the European Commission at the end of this month. Italy's debt is expected to remain roughly stable at 138.5 per cent in 2027, before declining to 137.9 per cent in 2028 and 136.3 per cent in 2029.
Greece's public debt, the highest in the euro zone for the past two decades, has shrunk by more than 60 percentage points from a peak of 209.4 per cent of GDP in 2020 to 145.9 per cent last year. Over the same period, Italy reduced its debt by about 17 percentage points. Greece, recovering from a decade-long financial crisis and three bailouts totalling around €280 billion, plans to repay ahead of schedule loans worth some €7 billion from its first bailout later this year.
Italian Prime Minister Giorgia Meloni has often said that Italy's debt would have started to fall sooner and faster without the negative impact of state-funded building incentives introduced under her predecessors, Giuseppe Conte and Mario Draghi. After rebounding from the COVID-19 pandemic, Italy has returned to its customary sluggish growth, posting three consecutive years of sub-1 per cent growth from 2023 to 2025. The Treasury's budget plan indicates this trend will persist through 2029.
In contrast, Greece's economy has grown steadily by more than 2 per cent over the last three years, outperforming the EU average, driven by investments, domestic demand, and tourism.
