The Greek economy is expected to shrink by 5 percent this year, lower than initially forecast, the country's central bank governor George Provopoulos said on Tuesday, presenting an annual monetary policy report in Athens.

Addressing the bank's general assembly, Provopoulos warned that Greece could again face "a very difficult situation", risk default and an exit from the eurozone if there is political instability after the May 6 general elections.

"We have won battles, but the war continues," he said, stressing that Greek officials and people alike should continue their efforts to resolve the crisis with determination and consensus.

"The conditions have improved, but an exit from the crisis will depend on the country's will and ability to tackle this historic challenge to implement the austerity program after the polls," Provopoulos stated.

The Bank of Greece said in the report that structural reform should be accelerated as pledged to international creditors.

The report recommended swift acceleration of reforms and sale of state assets to reverse the contraction of the economy, which at an estimated 5 percent of GDP is above the 4.5 percent forecast predicted last month by the bank's experts.

Greece could return to growth by 2014 and unemployment, expected to reach 19 percent this year up, could ease, Provopoulos noted.

Greece relies on multi-billion euro bailout packages from the International Monetary Fund, the European Central Bank and the European Union since May 2010 to avert a financial collapse in return for salary cuts, tax increases and structural reforms.

But painful austerity has fuelled recession and drawn angry reactions from the general public. According to opinion polls ahead of the elections, the two main parties that back the outgoing government of Lucas Papademos and his reforms, will not secure a parliamentary majority as anti-bailout political forces gain ground.