Central and Eastern European economies set for faster growth

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Central and Eastern European economies set for faster growth

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The economies of emerging European countries and those of central Asia will grow slightly faster than previously expected this year according to the latest forecasts from the European Bank for Reconstruction and Development.

However, the bank warned the euro zone crisis and rising commodity prices posed risks to their recovery.

Central and Eastern Europe was one of the worst hit areas during the economic crisis.

The economies of some countries in the region contracted by as much as 18 percent in 2009 before most rebounded last year.

Now, the EBRD believes the entire region should grow by an average of 4.6 percent this year, up from a previous forecast of 4.2 percent. It sees average growth of 4.4 percent in 2012.

Growth will be driven by a rise in domestic demand across most of the region — excluding some central and southern European states — while high oil and gas prices will benefit Russia and Kazakhstan, which are set to see economic growth of 4.6 and seven percent respectively this year.

Created at the end of the Cold War to help ex-Communist states make the change to market economies, the EBRD lends in 29 countries.

It is now looking at expanding lending into North Africa after social uprisings toppled some of the region’s autocratic governments.