* Slovak Q1 flash GDP estimate 8.7 pct, above market
forecast of 8.5 percent and below 14.3 percent in Q4
* Czech Q1 flash GDP estimate 5.4 percent, below 5.5 percent
forecast and 6.6 percent in Q4.
* Hungarian preliminary Q1 growth 1.6 percent, beating
market forecast of 1.25 percent and 0.8 percent Q4 growth.
By Michael Winfrey
PRAGUE, May 15 (Reuters) - Two of emerging Europe's biggest
economies -- Slovakia and the Czech Republic -- saw their rapid
expansions slow in the first quarter, but laggard Hungary showed
better than expected numbers in its slow march to recovery.
Analysts, who expected the Czech-Slovak drop off, are
watching the region for signs that the global slowdown and the
export-strong states' appreciating currencies could couple with
consumer-pinching inflation to take a bite out of growth.
Regional champion Slovakia's economy decelerated but still
showed a blistering 8.7 percent expansion from January to March.
The preliminary data, which did not have a breakdown of
individual sectors, was a huge climbdown from the 14.3 percent
seen in the last three quarters of 2007, a figure affected by
one-off factors.
The Czechs also saw a decline to 5.4 percent in the flash
estimate from 6.6 percent growth in the fourth quarter.
Hungary grew 1.6 percent year-on-year growth, surprising
analysts who had expected just 1.25 percent. The result was
double the 0.8 percent expansion in the previous period.
"While growth in Slovakia and the Czech Republic slowed in
the first quarter, it remains above trend," said Neil Shearing,
of Capital Economics in London.
"Meanwhile, although the pace of growth in Hungary
accelerated, the recovery could be on shaky ground."
Statistics for the 15-member euro zone, also released on
Thursday, showed a stronger-than-expected annual expansion of
2.2 percent in the first quarter. It was mainly due to a 1.5
percent quarter-on-quarter jump in Germany, its best economic
performance in 12 years.
MEETS FORECASTS
In March, Czech, Slovak and Hungarian industrial production
showed significant drops, mirroring a similar fall in exports.
But the flash growth estimates appeared to shrug that off,
and analysts said a "leap-year effect" of an extra working day
in February and an earlier-than-usual Easter in March had skewed
the output and trade data.
The Slovak growth numbers exceeded the market's 8.5 percent
forecast. Analysts explained the huge drop from end-2007 by
saying the fourth quarter spike came only after a spate of
cigarette hoarding by Slovaks ahead of a January tax hike.
"The sharp slowdown was expected due to large one off
factors taking place in the fourth quarter last year," said
Raffaella Tenconi, an economist at Dresdner Kleinwort. "On a
seasonally adjusted basis, real GDP rose by 9.5 percent."
For the Czechs, market watchers said a jump in inflation to
a nine-year high, in part due to one-off government tax reforms,
had bitten into consumer demand. That was compounded by tougher
government welfare measures and sagging demand in the euro zone.
"We expect GDP growth to slow down to as far as 4.0 percent
this year, mainly due to the euro zone growth slowdown," said
Jiri Skop, an analyst at Komercni Banka in Prague.
Hungary's statistics office said there were signs domestic
growth was recovering from the budget measures that slashed the
deficit to 5.5 percent of gross domestic product (GDP) in 2007
from 9.2 percent in 2006.
Analysts were cautiously optimistic but noted that, when
adjusted for the number of working days, the economy grew at
just 0.9 percent on the quarter, compared with 0.7 percent the
previous three months.
"Seasonally adjusted quarterly growth of 0.3 percent could
be the more reliable information about growth, which is
supporting the view of a slow, gradual recovery," said Gyorgy
Barcza at KBC in Budapest.
Poland, the region's biggest economy, will release
preliminary first quarter GDP figures on May 30. According to a
Reuters poll, the market expects annual growth to slip to 5.8
percent, from 6.1 percent in the previous three months.
(Editing by Gerrard Raven)
