ATHENS - Greece's economy will expand around 2 percent this year, close to last year's pace, the influential Greek think tank IOBE predicted on Thursday, maintaining a previous forecast.
The new forecast in the Foundation of Economic and Industrial Research's quarterly review is less than the government's 2.5 percent projection and close to the central bank's 1.9 percent projected rate.
The IOBE sees the 180 billion-euro economy continuing to expand, helped by a projected 1.3 percent increase in private consumption and a rise of as much as 11 percent in investments.
Greece's economy grew at an annual 1.9 percent in 2018 as the country emerged from its third and last bailout programme in August.
Stronger domestic demand is expected to spur imports, which the IOBE review forecasts will rise by 5.0 percent, with exports increasing 5.5 percent.
IOBE predicted that Greece's unemployment rate, the highest in the euro zone at 18.5 percent in January, will be milder this year, settling around 18 percent.
Greece's economy is recovering from a 10-year recession. It has to a large extent corrected the imbalances of its twin deficits - its fiscal derailment and the current account gap.
"However, it stands at a fragile balance with weak growth momentum because this adjustment mainly took place via a recession," IOBE head Nikos Vettas said.
"If the economy fails to free up productive forces through structural reforms there will be a quick return to recession, which could undermine the servicing of debt in the years ahead," Vettas said.
(Reporting by George Georgiopoulos) ((george.georgiopoulos@thomsonreuters.com; +30210 337 6437; Reuters Messaging: george.georgiopoulos.thomsonreuters.com@reuters.net))
