By Balasz Koranyi and Michael Winfrey
VIENNA, Jan 21 (Reuters) - Central Europe's economies are
feeling the pain of the global slowdown and policymakers across
the region will be forced to lower their growth projections, top
central bankers said on Wednesday.
Officials from Poland, Romania and the Czech Republic all
said their economies will perform worse than earlier thought as
the European Union sinks into a recession, domestic demand wanes
and domestic credit dries up. But none projected a recession.
Poland's central bank, which earlier forecast growth to slow
to 2.6 percent this year, from an expected 5 percent in 2008,
will be forced to cut that figure when it makes its new forecast
next month, Zbigniew Hockuba, a member of the central bank's
management board, told a conference.
"As the future is concerned... we have just until now a
projection of 2.6 percent growth," Hockuba said. "We know that
the February projection that we are just preparing, ... will be
lower."
The European Union earlier this week forecast Poland's
growth at 2 percent this year.
Hockuba, who is responsible for the Polish central bank's
inflation projection but is not on the rate-setting Monetary
Policy Council, added price growth was not a serious problem.
Inflation is rapidly slowing across the European Union's new
members. The export-heavy region is also seeing a fall in
production, while domestic demand has been hit by a contraction
in bank lending and the prospect of layoffs.
Czech central bank Governor Zdenek Tuma offered a similar
assessment and said that new growth forecasts, due next month,
will be lower than its latest ones.
Made in October and released in November, those projected a
base scenario for 2009 growth of 2.9 percent and an alternative,
more pessimistic scenario of 0.5.
"All I can say is that growth will be lower than expected in
October," Tuma said. The European Commission this week forecast
Czech growth at 1.7 percent for this year.
Similarly, Romania's central bank expects growth to slow
sharply.
But Deputy-Governor Cristian Popa said: "We do not believe
that Romanian growth will enter negative territory."
He said that unlike most central banks in the region, his
remained preoccupied with inflation, although the bank forecast
price growth to slow down in the "foreseeable future".
The European Commission this week forecast Romanian gross
domestic product growth (GDP) will slow to 1.8 percent this
year, from some 8 percent in 2008.
Popa added that a sharp drop in the leu currency, which hit
record lows against the euro this month at 4.3530 per euro
<EURRON=>, was more a feature of pessimism toward the region,
rather than the Romanian economy.
(Reporting by Balazs Koranyi, Peter Laca, Mike Winfrey; editing
by Stephen Nisbet)
