* Hungary's exports fall sharply in November
* Romania trade deficit narrows in November
* Slovak trade gap worse than expected
By Radu Marinas
BUCHAREST, Jan 9 (Reuters) - Slovakia and Hungary exports
fell sharply in November, while Romanian export growth slowed
down, depicting a grim growth outlook in central Europe as
weakening demand from the recession-hit euro zone takes its
toll.
Slovakia fell into a deficit of 7.3 billion crowns in
November, 11 folds wider than expected, as its exports plunged
15.6 percent, while Hungary had a higher-than-expected surplus
of 99.9 million euros, with exports dipping 10.4 percent.
A separate set of data on Thursday showed the Czech trade
balance posting an unexpected deficit, the worst November figure
since 2003, pointing to further worsening in 2009 as exports saw
the steepest fall in the region of 18 percent.
Economies in the region have been damaged by the global
financial crisis and analysts have said the impact of a halt in
Russian gas supplies on their industries may also aggravate the
situation if the Moscow-Kiev gas row is not resolved quickly.
"The trade numbers we've seen this week only confirm the
picture that we already knew ... exports have declined and that
would be a result of weaker foreign demand. The story is the
same across the region," said Lucy Bethell from RBS in London.
Slovakia's small and open economy relies heavily on exports
to the West and is affected by the global crisis as demand for
its products, mainly cars and electronic devices weakens.
In Germany, the EU's largest economy, industrial output fell
by 10 percent in November, its biggest annual drop since 1993,
dragged down by a sharp downturn in manufacturing that is
threatening to cause a record contraction in economic growth.
"Worsening of the environment is quite significant, the
decline in (Slovakian) exports is bigger than expected as well,"
said CSOB analyst Marek Gabris.
"We will feel this in the fourth quarter (2008) GDP data,
but it will be fully visible mainly in the first half this year.
The crisis is gradually spilling into the Slovak economy."
EASIER CREDIT
In Romania export growth slowed on the year as global demand
has dwindled but it was faster than import growth in the first
11 months of 2008, signalling possible narrowing of the trade
gap, seen as key to curbing its bulging external deficit.
Both import and export growth in the new EU member, the
bloc's most vulnerable economy, fell by around 3 percentage
points in November, when the leu currency <EURRON=> lost around
4 percent against the euro.
For the month of November alone, the trade deficit narrowed
to 1.68 billion euros from 2 billion euros in October.
Analysts say data point to rate cuts across the region.
They say as exports suffer, unemployment is rising, and
domestic demand is dampened by slowing bank lending, central
banks across the region are expected to continue cutting
interest rates further to give a boost to faltering growth.
"The data point to rate cuts," said Bethell. "It highlights
the fact that growth is slowing and, as such, inflationary
pressures should ease."
"The Czech began easing policy much sooner ... so is much
closer to the bottom of their cycle."
Czech consumer prices dropped in line with expectations in
December, putting the annual inflation rate at 3.6 percent, from
4.4 percent a month earlier, data showed on Friday
"Together with indications of collapsing exports and
industrial output, the data are supportive for further monetary
easing," said Radomir Jac, chief analyst at Generali PPF asset
management.
(Additional reporting by Martin Santa in Bratislava; Editing by
Andy Bruce)
