The Bank of Greece (BoG) said the country's economy is expected to grow by 2.2 per cent in 2023, higher than previous projections.
The 2023 state budget, passed in December last year, projected a 1.8 per cent increase in gross domestic product (GDP) growth for this year, reports Xinhua news agency.
Despite successive crises, the Greek economy has shown remarkable resilience in recent years, BoG Governor Yannis Stournaras said while presenting his annual report on Friday.
This is due to continued implementation of reforms and credible policies, he underlined.
Inflation is expected to drop to 4.4 per cent in 2023, down from 9.3 per cent in 2022. This reflects an expected decline in energy prices, said the report.
Meanwhile, the general government budget will return to a primary surplus of 0.7 per cent of GDP in 2023, after three consecutive years of deficits.
An unfavourable international macroeconomic environment had cast a shadow over the outlook for the Greek economy in 2023, said Stournaras, adding that continued credible policies would be required to meet these challenges.
"The greatest risk to the prospects of the Greek economy, at a time of successive crises and elevated uncertainty, would be the loss of economic policy credibility," he warned.
"It is true that any prolonged political uncertainty could undermine the climate of confidence that has been built up in recent years.
"However, the most significant risk to the economy would be a return to the inefficient policies of the past, and the halting and/or reversal of reform efforts," he said.
General elections in the country will take place on May 21.
Political analysts have predicted that no party will secure a parliamentary majority under the current electoral law, and therefore a second round will be held under a new law, which provides for extra seats for the winning party.
Stournaras called for political forces to show "prudence and responsibility", and to agree on the implementation of key economic policies, to safeguard the achievements of the economy over the past decade.