ATHENS - Greece's economy is projected to grow at a slower pace next year after a strong rebound this year thanks to tourism, as soaring energy costs and higher inflation are expected to curb domestic demand.

Under the government's 2023 draft budget published on Monday, economic output is seen increasing by 2.1% next year from 5.3% this year.

Next year, Greece is expected to achieve a 0.7% of gross domestic product primary surplus - which excludes debt servicing outlays - from a 1.7% budget deficit in 2022.

The country's public debt, the highest in the euro zone, is seen dropping to 161.6% of GDP from 169.1% of GDP this year, according to the draft budget submitted to parliament.

"The 2023 budget is being drafted under conditions of extremely high uncertainty, regarding geopolitical developments at a global level," finance minister Christos Staikouras and deputy finance minister Theodore Skylakakis said in a statement.

Greece's economy is growing more than expected in 2022, powered by strong tourism revenues, domestic demand and a spike in investments. However, consumer spending has faced challenges with inflation hitting its highest rate in three decades.

The draft budget forecast annual inflation easing to 3% by the end of 2023, from 8.8% this year.

The forecasts for growth and inflation have a high degree of uncertainty and may be revised by the European Commission before the submission of the final draft of the budget, the finance ministers said.

(Reporting by Lefteris Papadimas and Renee Maltezou, editing by Ed Osmond)