By Lefteris Papadimas

ATHENS (Reuters – Greece’s economy is forecast to grow 3.5% due to increased energy prices, and the Ukraine crisis. The International Monetary Fund stated Friday that the estimate for Greece was lower at 5.4%.

The fund stated that growth is likely to continue strong despite high inflation and the negative impact of war in Ukraine in a statement it released after visiting Greece.

The report stated that higher energy prices and increased risk aversion could lead to lower investments, which in turn might slow down the recovery of tourism.

The new estimate is less than Greece’s 4.5% forecast. The economy of Greece grew 8.3% between 2021 and 2021.

According to the IMF, average inflation in Greece will increase by 4.5% this year and settle at 1.9% for the medium-term. In February the country saw an increase in consumer inflation of 7.2%, which is a record for this country. This was a 25-year-high.

IMF’s mission for growth called for continued structural reforms and a fiscal adjustment that is more favorable to growth. It also recommended the return of primary surpluses in next year.

The public debt in Greece, which was around 20% of the GDP last year is likely to fall. Rollover risks seem manageable for the short term.

According to the statement, “Though there’s a moderate risk that sovereign stress will occur overall,” it said.