* July industry growth slows in Romania, Hungary, Slovakia
* Romania +2.3 pct yr/yr (vs June +4.7), Hungary +9 vs +15.2
* Slovak output growth still robust at +16.8 pct
* Hungary Q2 household consumption -4.9 pct yr/yr
* Czech Q2 household consumption up 0.6 pct q/q
By Sandor Peto
BUDAPEST, Sept 8 (Reuters) - Industrial output growth slowed
in July in Hungary, Romania and Slovakia, adding to concerns
that an expected slowdown in the euro zone could dent recovery
in some of the EU's export-reliant emerging economies.
The Czech Republic, meanwhile, raised its economic growth
estimate for the second quarter by 0.1 percentage point to 0.9
percent quarter-on-quarter, with a 0.6 percent rise in household
consumption helping its export-led growth. []
Czech data also showed a dip in the country's unemployment
rate to 8.6 percent in August from 8.7 percent in July. But July
output growth underperformed forecasts elsewhere in the region.
Its annual rate slowed in July to 2.3 percent from 4.7
percent in June in Romania. In Hungary it slowed to 9 percent
from 15.2 percent and Slovakia's to 16.8 percent, from 23.5.
"There are signs that they are slowing somewhat, but it's
not that dramatic yet," said Gergely Suppan, analyst of
Takarekbank in Budapest. "But if the United States slows and
that affects Europe, Central Europe will be affected too."
Figures for the third quarter have provided mixed signals in
Central Europe so far.
Purchasing managers' indices released last week showed a
surge in orders in August as recovery in Germany, the region's
key export market, fuelled manufacturing growth. []
But the recovery is particularly fragile in Hungary and
Romania, where austerity measures have hit consumption hard and
exports may suffer if big European Union members start to
tighten their budgets.
"We expect a slowdown (in Hungary's manufacturing growth)
later this year as the consumer remains depressed, the
short-term effects of the inventory cycle fade and European
governments embark upon austerity," said Zsolt Kondrat of MKB.
CONSUMPTION DIVIDE
Slovakia's export-driven industrial output growth remains
robust despite the July slowdown. In Poland, the region's
largest economy, central bank Governor Marek Belka forecast 3.5
percent economic growth for 2010. []
Details of Hungary's second-quarter gross domestic product
figures showed the annual contraction in household consumption
had picked up to 4.9 percent from 4.7 in the first quarter, and
to 14.1 percent in the construction sector from 8.7 percent.
That outlook has also been darkened by issues with the
forint currency <CHFHUF=>, which fell to new record lows against
the Swiss franc on Wednesday.
The surge of the value of the huge amount of franc loans
held by Hungarian households has heavily contributed to the
weakness of domestic demand and Hungary's government expects
only meagre 0.6-0.8 percent economic growth for the year.
Neighbouring Romania has even gloomier growth prospects.
Like Hungary, it has carried out deep budget cuts to meet
the conditions of International Monetary Fund (IMF) aid. The IMF
sees Romania's economy shrinking by 1.9 percent this year.
Analysts said it would be too early to draw conclusions
from a 0.8 percent month-on-month contraction in industrial
output in July after 1.9 percent rise in June, but they said the
rest of the year could be tricky.
"The figures are not as bad as they appear, the contraction
follows the previous month's really strong growth," said Vlad
Muscalu of ING Bank in Bucharest. "But we expect industrial
output to decelerate further as... demand from our EU partners
slows down."
The Czech GDP figures, meanwhile, confirmed that the economy
was in gradual acceleration in the second quarter, even though
it lagged behind the more dynamic economy of Slovakia.
"It is possible the central bank will raise its estimate for
growth... which might mean an earlier rise in interest rates,"
said Pavel Sobisek, analyst of UniCredit Bank in Prague.
(Reporting by Sandor Peto; editing by Patrick Graham)
