Demographic processes such as international migration, internal rural–urban movements, and short‐range residential mobility are increasingly driven by economic cycles. To assess how economic downturns have influenced demographic dynamics across regions in Greece—perhaps the European country most affected by the 2007 recession—the present study investigates spatial patterns of population increase and decline (2002–2017) in 51 prefectures, evaluating the contribution of natural balance (births minus deaths) and migration to total population growth during economic expansion (2002–2009) and recession (2010–2017). Population increased during economic expansion in semicentral regions with medium‐size urban centres, upper economic functions (university and international airport), and road infrastructures. Although natural balance was positive in almost all prefectures, migration contributed the most to population growth during 2002–2009. A generalised population decline was observed during recession, except in coastal areas specialised in tourism, the only regions still attracting migratory flows and maintaining a slightly positive natural balance. The largest urban areas (Athens, Salonika) experienced the highest rate of population decline, thanks to accelerated emigration and a moderately negative natural balance. Population dynamics during economic expansion contributed to increase a traditional density gap between urban and rural areas. Conversely, population dynamics during recession led to a spatial redistribution of population, reducing the gap between urban areas and rural, tourism‐specialised coastal districts. Evidence in our study supports a need for further investigation into the role of economic downturns in future population redistribution processes, specifically “shrinking” regions.