Prague: Countries in the EU's eastern wing grew faster than expected in the second quarter, clawing further out of deep contractions last year and raising the prospect of slightly higher full year growth forecasts.
Flash estimates from Hungary, Romania, Slovakia, the Czech Republic and Bulgaria at the end of last week contained few details but tracked a surprisingly growth surge in Germany, the region's biggest export market and the main driver of the industry-based rebound.
Euro zone member Slovakia led the pack, with 1.2 per cent growth from the previous three months and a 4.6 per cent expansion from a year ago. The Czechs grew 0.8 per cent and 2.2 per cent, a touch above forecast.
Hungarian gross domestic product was flat on the quarter but up 1 per cent on the year, and Romania emerged, likely only briefly, from a recession that has dogged it since the start of last year.
Analysts said the data, fuelled by bourgeoning demand in China and other Asian economies for European goods, could prompt policy makers to tweak their full year growth forecasts higher.
But they added the countries, particularly Romania and Hungary, would face headwinds in the second half, while persistently weak domestic demand meant the recovery was still dependent on more developed western states.
"Overall it has surprised us on the upside. We suspect basically this is largely due to exports to the euro area, and then as re-exports to Asia. We think that is what is driving this," said Peter Attard Montalto, an analyst at Nomura.
"We see some kind of dip back, particularly in the Hungarian and Romanian numbers, in the second half of the year as we get the fuller impact of what's going on in each country."
Bulgaria's economic decline slowed to 1.5 per cent on an annual basis, compared with a 3.6 per cent drop from January to March.
