The Bank of Greece says it expects the country's economic output to contract by 2 percent in 2010 — worse than a government prediction.

An annual report released Monday says the recession is likely to be exacerbated by government spending cuts, but approves of the measures aimed at controlling the country's high budget deficit.

The government says its economy will shrink by 1.2 to 1.7 percent this year, while the EU Commission projects a 2.25 percent contraction.