Greek parliament approves 2023 budget projecting slower growth

ATHENS, Dec 17 (Reuters) - Greek lawmakers on Saturday approved the country's 2023 budget, which projects a slower expansion of the economy as soaring energy costs and higher inflation hurt domestic demand.

The budget forecasts the economy will grow by 1.8% next year, down from a projected 5.6% this year, and generate a primary surplus - which excludes debt servicing costs - of 0.7% of gross domestic product (GDP).

In his address to the assembly, Prime Minister Kyriakos Mitsotakis said the budget did not ignore the obstacles ahead.

"Unfortunately," he added, "global instability remains, as do inflationary pressures, which means that fiscal flexibility must be in harmony with fiscal balance."

Inflation in Greece reached a near three-decade peak of 12% earlier this year, among the highest in the euro zone's 19 member countries.

Greece emerged from a decade-long debt crisis in 2018 that forced it to sign up to three international bailouts. Its economic rebound is pivotal as it aims to return to an investment-grade debt rating next year.

A majority of lawmakers in the 300-seat parliament approved the budget, which also projects consumer price inflation will be reduced to 5% in 2023 from 9.7% this year.

Greece's public debt, the highest in the euro zone, is seen dropping to 159.3% of GDP next year from 168.9% this year. (Reporting by Karolina Tagaris; Editing by David Holmes)