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%.