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Greek economy to shrink 5 pct in 2012-cenbank chief
April 24, 2012 / 9:16 AM / 6 years ago

Greek economy to shrink 5 pct in 2012-cenbank chief

ATHENS, April 24 (Reuters) - Greece’s economy will contract by a steeper-than-expected 5 percent this year, the country’s central bank chief said in a speech to the bank’s shareholders on Tuesday.

The central bank in March had forecast a 4.5 percent contraction in the economy this year.

Bank of Greece chief George Provopoulos said the country must stick to its reform and fiscal adjustment commitments under a bailout plan agreed with its euro zone partners and the IMF to return the economy to growth.

He also warned that the country’s membership in the euro zone was at stake if it failed to follow through on its pledges to reform, especially after national elections on May 6.

“If following the election doubts emerge about the new government and society’s will to implement the programme, the current favourable prospects will reverse,” he said.

He said the euro zone was set for a mild recession this year which could deepen if the debt crisis escalates.

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