Central and Eastern Europe will likely see a stronger-than-expected growth in the next two years on the back of a rebounding German recovery that should help Hungary to avoid a full-year recession in 2012, London-based emerging markets analysts said on Friday.

In a detailed forecast chart, BNP Paribas reveals that it now expects Hungary’s economy to grow by 0.1% this year, a sharp revision from the previous forecast that had called for a GDP fall of 0.9% in 2012 as a whole.


BNP Paribas expects Hungary’s growth to accelerate to 2.2% next year.


“Since Germany is the main trading partner for Central European economies, (the) revision (of Germany’s growth forecast) has raised our growth expectations for CEE as well … Relative to our previous forecast, we have revised up our growth expectations for the region by 0.8pp for 2012 and by 0.4pp for 2013 to 1.4% and 2.6%, respectively”.


In its new, updated forecast, BNP Paribas said it had revised up its GDP forecast for Germany and is now looking for 1.1% German growth this year, 0.7pp higher than its previous projection of 0.4%.