MADRID, Sept 21 (Reuters) - Spain’s economy grew at a similar pace in the third quarter than in the previous one thanks to a solid domestic demand and looser COVID-19 restrictions, the Bank of Spain said on Tuesday, raising its forecasts for 2021 and the next two years. The Bank of Spain released a new central scenario for its projections, still insisting there is a high degree of uncertainty due to potentially more contagious pandemic variants but dropping two additional potential paths, one more pessimistic and the other more optimistic. In the third quarter, it expects Spanish gross domestic product to grow 2.7% after rising 2.8% in the April to June period. “A (COVID-19) incidence hike observed until the end of July hardly disrupted the process of easing restrictions as the health consequences were less severe than in previous waves thanks to a progress in vaccination campaigns,” the central bank said in its quarterly report. After a record 10.8% slump last year, the central bank expects gross domestic product to expand 6.3% in 2021, up from a 6.2% forecast in June. The central bank forecasts came just after Economy Minister Nadia Calvino said that GDP was likely to recover to pre-pandemic levels by the end of this year, as she maintained previous growth forecasts for this year and the next.Speaking at a news conference, Calvino maintained the economic growth targets of 6.5% for 2021 and 7% for 2022 and added that GDP would likely be higher in the first quarter of 2022 than in the first quarter of 2019. The central bank meanwhile raised its forecasts to 5.9% for next year, from a prior 5.8%, and to 2.0% for 2023, from 1.8%, with the central bank expecting the Spanish economy to recover to pre-pandemic levels during 2022, instead of by the end of next year. The central bank cited continued support from fiscal and monetary policies as being among factors underpinning this outlook. It said it expected the economy to benefit from a reduction of high public debt levels and from the implementation of European funds although some uncertainties still remained about their contribution to economic activity. (Reporting by Jesus Aguado and Emma Pinedo; Editing by Inti Landauro and Alison Williams)