* Hungarian, Czech, Slovak Q1 GDP due May 15
* Hungary GDP seen down 5.9 pct y/y in quarter
* Czech, Slovak economies seen contracting 2.4 pct Q1
* Full-year outlook not much brighter; eyes on U.S.
For TABLE with poll details: []
By Mirka Krufova and Jan Lopatka
PRAGUE, May 12 (Reuters) - Hungary's economy probably
slumped by 5.9 percent <HUGDP=ECI> and Czech and Slovak output
also fell in the first quarter when the full force of the global
crisis hit central Europe, a Reuters poll showed on Tuesday.
The Czech <CZGDPQ=ECI> and Slovak <SKGDPQ=ECI> economies
probably both dropped by 2.4 percent year-on-year in the first
quarter, the poll showed.
The survey showed the economies contracted as their main
source of growth -- exports to western Europe -- evaporated,
while credit and investment flows dried up and demand waned.
Analysts said many companies were trimming inventories, which
would also show as negative in the GDP data.
A recovery in central Europe hinges on an upturn in the
United States and the euro zone. Analysts say the region has yet
to hit bottom despite some signs of recovery abroad and the lift
to its large car industry from scrap subsidies in the west.
All the three central European countries are due to report
gross domestic product (GDP) estimates on Friday, May 15.
Poland, the region's biggest economy, will report on May 29.
A Reuters poll published on Monday forecast first quarter Polish
growth of 1.0 percent and full year growth of 0.5 percent.
[]
The Hungarian slump is worse than a 4 percent drop expected
for the euro zone, in data also due on Friday [].
Hungary's heavy external debt meant it was worst hit by the
global crisis and the first in the region to tap foreign aid, in
the form of a $25.1 billion rescue package led by the
International Monetary Fund.
A currency fall coupled with the need to keep the budget
tight under IMF conditions has combined with the drop in foreign
demand to squeeze the economy.
"Risks are skewed on the downside given the need to maintain
an extremely tight fiscal policy under the IMF programme and the
limited scope for interest rates to be cut without causing
(forint) concerns," said Nigel Rendell of Royal Bank of Canada,
who forecast a 4 percent fall.
Inflation, lifted by the currency drop, has prevented the
central bank from significantly easing monetary policy. Prices
jumped unexpectedly in April. []
The forint <EURHUF=>, which hit a record low in March,
rallied to a 4-month high around 276 per euro last week, as
global sentiment turned more positive and investors looked for
policy changes announced by the country's new government.
Prime Minister Gordon Bajnai took office last month on a
pledge to steer Hungary out of the crisis, the worst in two
decades.
His new government plans to cut state spending sharply this
year and next and put the country back on track to adopt the
euro, which could allow for some policy easing.
The Reuters poll saw Hungary's GDP shrinking 5.5 percent
this year.
CZECHS SUFFER, EURO NO RESCUE FOR SLOVAKIA
In the Czech Republic, relatively low inflation and foreign
debt and a better budget position have limited the crisis impact
on the currency and demand, but manufacturing fell by over 20
percent in the first quarter.
The poll predicted a 2.6 percent year-on-year fall in Czech
GDP in 2009.
"While recent data from U.S. and Germany indicate that the
worst impact of falling production and exports is over, the full
impact of the rapidly deteriorating labour market and reversing
credit and housing market boom is yet to be seen," said Miroslav
Plojhar, EMEA economist at JP Morgan.
"A potential upturn in the second half of 2009 will be
strongly dependent on a rebound in Western Europe, which is the
main risk."
Slovakia avoided any currency crisis thanks to its euro
adoption in January, but it has been equally hit by the collapse
of foreign demand which crippled its car exports.
The poll predicted a 2.0 percent full-year drop.
"For the first time since its existence, the Slovak economy
is heading into full-year recession in 2009, caused by weak
foreign demand and ongoing recession in the euro area," said
Maria Valachyova, senior analyst at Slovenska Sporitelna.
(Editing by Ruth Pitchford)
