Economic growth in the 10 accession countries due to join the EU next May will surge ahead in the next two years, with growth rates twice the level of the existing member-states, according to the European Commission's Autumn Economic Forecasts.
The Commission expects economic growth in the region to reach an average of 3.8 per cent next year and 4.2 per cent in 2005, compared with 3.1 per cent this year.
The report warns, however, that budget deficits in six of the 10 countries will be above the euro-zone's limit of 3 per cent of gross domestic product (GDP) in 2003, with an average deficit of 5 per cent.
Poland, by far the largest of the new member-states, is expected to have a budget deficit of 5.9 per cent in 2004.
The Commission says that the strong growth figures are due to rising exports and industrial output and strong private consumption fuelled by low interest rates, reinforced by the prospect of EU membership.
The economic recovery will not translate into jobs however and unemployment in the region is expected to remain close to 15 per cent in 2005.
The Baltic states of Lithuania and Latvia, which are expected to show economic growth above 6 per cent this year, are by far the best performers among the 10 new member-states.
Malta, which was hit by a global downturn in tourism, will be the worst performer this year, with GDP growth of 0.8 per cent.
Poland appears to be emerging from two years of slow growth and its economy is expected to grow by 3.3 per cent this year and by 4.4 per cent in 2004.
The Commission predicts that Poland's will be a jobless recovery, however, with unemployment rising to more than 20 per cent this year and continuing to rise in 2004.
Economic growth in Hungary is expected to fall slightly to 2.9 per cent this year, before recovering gently in 2004 and 2005.
The Commission expects the Czech economy to grow by a modest 2.2 per cent this year and by 2.6 per cent in 2004.
The report warns that Prague's public finances will deteriorate this year, with the budget deficit reaching 8 per cent of GDP.
