Greece's economy will shrink 1.0 percent this year with the recession expected to deepen after a 0.3 percent contraction in 2015, the country's influential think tank IOBE projected in a quarterly report on Wednesday.
New fiscal measures to meet bailout targets will have an impact on private consumption and employment in sectors of the economy, leading to a decline in gross domestic product, IOBE said, despite a projected further rise in tourism.
Athens and its official creditors have yet to conclude a first review of compliance with reforms prescribed in the country's third bailout, which will pave the way for debt relief talks.
The think tank expects unemployment to rise slightly to 25.2 percent this year from 24.4 percent in the last quarter of 2015.
While lower disposable income as a result of new fiscal measures will remain a deflationary factor, new indirect taxes will have a countervailing impact, it said, leading to zero inflation or slight deflation this year.