Crisis-hit Greece took a step closer to recovery on Friday with official data showing that the six-year recession choking the country was easing faster than expected. Overall, the figures indicate that Greece has now managed to cut the recession by almost half in the space of one year. The state statistics agency said in a flash estimate that the Greek economy had contracted by 2.6-percent on an annual comparison. Based on this data, the economy on average contracted by 3.7 percent in 2013, better than a previous forecast of 4.0 percent, according to AFP calculations. However, the agency noted that a clearer picture would be available on March 11 with the announcement of provisional results. In 2012, the economy shrank by 6.4 percent. This year it is expected to register growth of 0.6 percent for the first time since 2008, according to the finance ministry. "The Greek economy exits out gradually of the recession. Nevertheless we do not expect this to happen definitively until the second half of 2014," Jesus Castillo of French investment bank Natixis said in a note. The latest figures constitute a welcome boost to the embattled coalition government of Prime Minister Antonis Samaras, who is at pains to show that four years of gruelling austerity are now bearing fruit. Also on Friday, the statistics agency announced an inflation drop of 1.5 percent in January, compared to a 1.7-percent fall in December. Prices in Greece have officially been in decline since March, but most Greek households struggling under an ongoing tax barrage have yet to feel the benefit, consumer groups and unions note. The government faces a tough local elections challenge in May, with anti-austerity parties poised to gain heavily from widespread anger over the six-year recession and soaring unemployment gripping the country.