The Greek economy is expected to return into positive territory in 2012, after growth bottomed out in late 2010, the International Monetary Fund stated on Monday.

In its world economic outlook report, the IMF said that macroeconomic and fiscal projections for 2011 and the medium-term are consistent with the policies that the IMF has agreed to support in the context of the stand-by agreement. Fiscal projections assume a strong front-loaded fiscal adjustment, which already began in 2010 and will be followed by further measures in 2011-2013.

The IMF stressed that current account deficit remained excessively high in Greece, at 10.4% of GDP in 2010, however it noted there were signs of a turnaround as exports started contributing to the adjustment in 2010. Wage moderation has played a relatively modest role in Greece last year, while a number of policies can contribute to the remaining adjustments that will be required and many are already being implemented in the country. The policies include measures on both the supply side and the demand side of the economy.

The International Monetary Fund projects that real GDP in Greece shrank 4.5 pct in 2010, it will shrink by 3.0 pct this year and will grow by 1.1 pct in 2012. The inflation rate is projected to steadily decline from 4.7 pct in 2010, to 2.5 pct this year and to 0.5 pct in 2012, while the country’s current accounts balance is projected to fall from -10.4 pct of GDP in 2010, to -8.2 pct in 2011 and -7.1 pct next year. The unemployment rate, however, is expected to continue rising from 12.5 pct in 2010, to 14.8 pct in 2011 and to 15 pct in 2012.