Greece will leave the euro zone next year and the country's new currency will "immediately fall by 60 percent," according to Citi chief economist Willem Buiter.

Greek officials have repeatedly stressed that the country will be running out of cash by the end of June, after which it would be unable to make debt payments and pay civil wages and pensions. An election is scheduled for June 17 after inconclusive results of the May 6 polls meant a government could not be formed.

The Troika of international lenders — the European Union, the European Central Bank, and the International Monetary Fund — are waiting to see what government will result from the elections next month before disbursing more aid.

"The elections (on June 17th) will not produce a viable government that can follow the troika plan, leading to a stalemate between the Greek government and official creditors, and to the suspension of EFSF-IMF funding,” Buiter wrote in Citi'slatest Global Economic Outlook.

However, analysts caution that a default wouldn’t automatically lead to an expulsion of Greece from the euro zone.

As UBS writes in a recent report: "There is plenty of precedent for defaulting inside a monetary union, so [a Greek] exit should not be assumed to be automatic."

Limited Cash Reserves

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