* Hungary output falls less than expected 15.6 pct in March
* Hungarian, Czech trade accounts post robust surpluses
* Data suggest output may have reached bottom - analysts
By Krisztina Than and Gergely Szakacs
(Wraps Hungarian and Czech data)
BUDAPEST, May 7 (Reuters) - Output in Hungary fell less than
expected in March while both the Hungarian and Czech trade
accounts posted big surpluses which analysts said were the first
signs of improvement in the region's export-led economies.
Industrial output has been falling steeply for months in
central Europe's heavily export-reliant economies as the global
economic crisis hit their key markets in western Europe,
primarily in Germany.
But data on Thursday showed Hungary's output <HUIND=ECI>
fell by an annual 15.6 percent in March based on unadjusted data
after plunging 28.9 percent in February, and at a much lower
pace than analysts' median forecast for a fall of 21.5 percent
in a Reuters poll <HUIND1>.
At the same time, Hungary's trade account posted a surplus
of 492.8 million euros <HUTRD=ECI> in March based on preliminary
data compared with a forecast of a 285 million euro surplus
<HUEUR01>.
The Czech foreign trade balance also had a record surplus of
23.4 billion crowns ($1.17 billion) in March, more than triple
analyst forecasts in a Reuters poll.
Analysts said the data were encouraging in the sense that
economies had likely hit the bottom in the first quarter of the
year, but a plunge in imports indicates domestic demand is
shrinking fast.
"The two sets of data (Hungarian output and trade) underline
that the economy has likely reached a bottom around Feb-March
and these are the first real economy data showing some
improvement," said Gyula Toth, analyst at Unicredit.
"The major divergence between import and export dynamics
however clearly underlines that the domestic demand adjustment
is still underway and this will continue to represent a drag on
growth," he added.
Zsolt Kondrat at MKB Bank in Hungary said the data should be
treated with a pinch of salt.
"The data suggest that industrial production might have
reached bottom in the region but it is too early to herald the
end of the recession as production is still at a very depressed
level," Kondrat said.
The economic data, along with a benign global sentiment,
helped lift both the forint <EURHUF=D2> and the Czech crown
<EURCZK=>, with the forint hitting four-month highs of around
278.50 versus the euro.
NO IMPACT SEEN ON CZECH RATE DECISION
Analysts said Czech exports appeared to have been lifted by
a car scrap subsidy, in which the governments in countries like
Germany are giving cash handouts to consumers to turn
in their old cars and buy new ones.
The economic crisis has also depressed imports because
consumers are buying fewer foreign-made goods in the region.
In Hungary, weak export demand caused an 18.2 percent annual
fall in exports in euro terms. However, imports fell even more
sharply, by 23.4 percent year-on-year, and analysts said the
government's deep spending cuts could dampen demand further.
The government expects the Hungarian economy to contract by
up to 6 percent due to a fall in exports and consumption.
Analysts said the trade data were unlikely to have an impact
on the Czech rate decision later in the day. The bank is
expected to cut rates by 25 basis points. [].
"It's not going to have an impact on today's central bank
decision. They are unlikely to interpret this one number as a
recovery, as they will see the improvement is mainly due to the
scrap subsidy," said Martin Lobotka, an economist at Ceska
Sporitelna.
(Writing by Krisztina Than; Editing by Andy Bruce)
