CEE MARKETS 1-Forint rebounds after deficit plan, other FX up

                                
 * Forint, stocks rebound as markets digest deficit plan
                                
 * Other FX up; exports give boost to region's GDP
                                
 
                                
 WARSAW, June 9 (Reuters) - The forint led a rebound in
emerging European currencies on Wednesday and Budapest shares
jumped around 1 percent after investors digested Hungary's
deficit-cutting plan.
                                
 Hungary's Prime Minister Viktor Orban told parliament on
Tuesday his government would introduce a flat income tax and a
levy on banks and cut some public sector pay to keep the budget
deficit at 3.8 pct of GDP, as agreed with foreign lenders.
Hungary is also banning mortgages in foreign currencies.
[ID:nLDE6570SV]
                                
 Market watchers mostly welcomed the plan, although some said
the measures posed risks to the forint and to the overall
outlook in the longer-term.
                                
 "There seems to be a lot of scepticism going around on the
measures that the PM announced yesterday," analysts at Chevreux
wrote in a note. 
                                
 "But looking through the list, the government is clearly
aiming at cutting costs .... a solid first step in our view."
                                
 By 0732 GMT the forint <EURHUF=> rose almost 1 percent to
280.9 against the euro. Hungary's stocks were also up 1.1
percent while the country's 5-year credit default swaps (CDS)
stood at around 386, down from over 400 bps last week, its
highest level in 13 months.
                                
 Hungary's statistics office data said earlier Hungary's
economy grew by an annual 0.1 percent in the first quarter, in
line with preliminary estimates. [ID:nLDE65805N]
                                
 The economy is seen stagnating this year after a sharp
contraction in 2009, and analysts said some of the government
plans such as a new bank tax could hinder lending and drag on
the economic recovery.
                                
 Analysts expect overall central European economic growth --
led by Poland -- to outpace that of the western EU this year,
though the pace is dependent on trade to the euro zone.
                                
 The Czech stats office revised first quarter growth upward
to 0.5 percent up from the previous three months, from the
previous 0.2 percent. [ID:nLDE658063]
                                
 The Czech crown <EURCZK=> rose some 0.3 percent to the euro,
while Poland's zloty <EURPLN=>jumped 0.5 percent and Romania's
leu <EURRON=> was up 0.1 percent, with dealers mostly citing thr
rising forint as the key driver to central Europe's currencies.
                                
 
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2010 
Czech crown      <EURCZK=>  25.905   25.994   +0.34%   +1.59%
Polish zloty     <EURPLN=>   4.116    4.137   +0.51%   -0.29%
Hungarian forint <EURHUF=> 280.9    283.56    +0.95%   -3.76%
Croatian kuna    <EURHRK=>   7.241    7.242   +0.01%   +0.94%
Romanian leu     <EURRON=>   4.215    4.22    +0.12%   +0.53%
Serbian dinar    <EURRSD=> 103.79   103.73    -0.06%   -7.62%
All data taken from Reuters at 0932 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
                                
 
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 (Reporting by Reuters bureaus, Writing by Dagmara
Leszkowicz; editing by Jason Webb)