The December 2025 unemployment rate in GR fell to 8.20%, marking a 0.40 percentage point (pp) decrease from November’s 8.60%. This figure is below the six-month average of 8.50% and significantly improved from the 10.40% peak recorded in June 2025. The labor market shows signs of gradual recovery after mid-year volatility, reflecting improving economic activity and easing financial conditions.

Drivers this month

• Service sector hiring increased by 1.20%, driven by tourism and retail.
• Manufacturing layoffs slowed, with a 0.50% net employment gain.
• Youth unemployment dropped from 15.30% to 14.10%, indicating better entry-level job prospects.

Policy pulse

The 8.20% unemployment rate remains above the central bank’s estimated natural rate of 7.50%, suggesting some slack in the labor market. This supports a cautious monetary policy stance, with the central bank likely to maintain accommodative rates to foster further job growth without stoking inflation.

Market lens

Immediate reaction: The EUR/GRD currency pair appreciated 0.30% within the first hour post-release, reflecting optimism about economic recovery. Short-term government bond yields edged down by 5 basis points, signaling reduced risk premia on sovereign debt.

Unemployment is a core macroeconomic indicator closely tied to GDP growth, inflation, and consumer confidence. The 8.20% rate in December 2025 contrasts with the 9.50% recorded in March 2025 and the 8.00% low in September 2025, illustrating a volatile but improving labor market.

Monetary Policy & Financial Conditions

The central bank’s key interest rate remains at 1.25%, unchanged since October 2025. Financial conditions have eased slightly due to lower bond yields and stable credit spreads. The unemployment improvement supports a gradual normalization of monetary policy but cautions remain due to persistent inflationary pressures.

Fiscal Policy & Government Budget

Fiscal stimulus measures, including targeted job creation programs and infrastructure spending, have contributed to the labor market recovery. The government’s budget deficit narrowed to 3.20% of GDP in Q3 2025, down from 4.10% a year earlier, reflecting improved tax revenues and controlled spending.

External Shocks & Geopolitical Risks

GR’s export sector faces headwinds from ongoing geopolitical tensions in neighboring regions, which could dampen growth prospects. However, energy price stabilization and easing supply chain disruptions have mitigated some external risks, supporting domestic employment.

Market lens

Immediate reaction: The GR equity index (GRIDX) rose 0.70% following the release, reflecting investor confidence in the improving labor market. The 2-year government bond yield declined by 6 basis points, while the local currency strengthened modestly against the USD.

Looking ahead, the unemployment rate trajectory will depend on several factors, including monetary policy adjustments, fiscal stimulus continuation, and external geopolitical developments. We outline three scenarios:

Bullish scenario (30% probability)

• Unemployment falls below 7.50% by mid-2026 as economic growth accelerates.
• Strong job creation in technology and green energy sectors.
• Monetary policy begins gradual tightening without disrupting labor markets.

Base scenario (50% probability)

• Unemployment stabilizes around 8.00% through 2026.
• Moderate growth with balanced fiscal and monetary policies.
• External risks contained but persistent inflation limits aggressive rate hikes.

Bearish scenario (20% probability)

• Unemployment rises above 9.00% due to renewed geopolitical shocks or fiscal tightening.
• Slower job creation and increased layoffs in vulnerable sectors.
• Monetary policy tightening triggers financial market volatility.

Policy pulse

Given the current unemployment rate above the natural rate, the central bank is expected to maintain accommodative policies in the near term. However, persistent inflationary pressures may force a gradual rate increase starting Q3 2026.

The December 2025 unemployment rate decline to 8.20% signals a positive shift in GR’s labor market. While challenges remain, including geopolitical risks and inflation, the data supports a cautiously optimistic macro outlook. Policymakers face the delicate task of balancing growth support with inflation control. Financial markets have responded favorably, reflecting confidence in the recovery path.

Key Markets Likely to React to Unemployment Rate

The unemployment rate is a critical barometer for GR’s economic health, influencing multiple asset classes. The following tradable symbols historically track labor market shifts and are likely to react to future unemployment data:

• GRIDX – GR’s main equity index, sensitive to economic growth and employment trends.
• EURGRD – Currency pair reflecting GR’s economic outlook and monetary policy expectations.
• TECHG – Technology sector stock, often leading job creation in emerging industries.
• GRBTC – Cryptocurrency linked to GR’s fintech innovation, sensitive to risk sentiment.
• USDGRD – USD to GRD exchange rate, influenced by capital flows and economic data.

FAQ

What is the current unemployment rate in GR?

The latest figure is 8.20% as of December 2025, down from 8.60% in November.

How does the unemployment rate affect monetary policy in GR?

The rate above the natural level suggests some labor market slack, supporting accommodative monetary policy to boost employment.

What are the risks to the unemployment outlook?

Geopolitical tensions, inflation pressures, and fiscal tightening pose downside risks, while continued stimulus and growth in new sectors offer upside potential.

Key takeaway: The December 2025 unemployment rate improvement to 8.20% signals a recovering labor market, but policymakers must navigate inflation and external risks carefully.