* Hungary output down 28.9 pct in Feb on poor exports
* Slovakia sees first ever recession
* Euro zone outlook bleak
By Balazs Koranyi
BUDAPEST, April 7 (Reuters) - Hungary's industrial output
plunged in February while Slovakia said its economy would slip
into recession for the first time as the global economic crisis
took its toll on central Europe's export-driven economies.
Grim data and forecasts out of the region came as the EU
statistics office Eurostat lowered its fourth-quarter gross
domestic product figure for the euro zone [] and as
British industrial output suffered its biggest annual drop in
February since records began 40 years ago. []
Hungary, which relies heavily on exports to the euro zone,
said its output <HUIND=ECI> fell by an annual 28.9 percent in
February based on unadjusted figures, after a 22.9 percent drop
a month earlier as both exports and domestic sales imploded.
The fall was faster than analysts' expectation for a 23
percent drop and some said it indicated that forecasts for gross
domestic product will have to be revised to show an even deeper
contraction this year than the 5-6 percent now expected.
"Industry gives 25 percent of the supply side in GDP, so
this will alone warrant the 5-6 percent recession now expected
for Hungary," KBC analyst Gyorgy Barcza said.
"It may be even worse, at around 7 percent if the growth
stimulus fails in Europe in the second half, but probably it
will help to avoid this," he added.
The EU's eastern bloc -- an engine of growth in recent years
-- has seen its prospects slide since late last year as worries
over external financing and the evaporation of capital in the
credit crunch took their toll.
Hungary, Latvia and Romania have all already sought aid from
the IMF in the crisis, but hopes have grown that last week's
injection of funds by the Group of 20 into the Fund could help
draw a line under the region's troubles.
SLOVAK RECESSION
Yet even if the concerns over financing ease, analysts say
collapsing demand in the euro zone signals there is unlikely to
be any quick turnaround even for stronger-performing economies
like Poland and the Czech Republic.
Slovakia's central bank said on Tuesday the euro zone
newcomer's economy would suffer its first economic contraction
in 2009 as export markets suffer. It saw GDP down 2.4 percent
this year, against a previous forecast of 2.1 percent growth. It
said the economy would recover to grow 2 percent in 2010.
"There has been a change of view on the development of
Slovakia's economy," NBS Vice-governor Martin Barto told a news
conference. "The main feature is that Slovakia will swing into
recession this year."
Slovakia has not had negative economic growth since it
emerged as an independent state in 1993 following the peaceful
break-up of Czechoslovakia, although growth slowed last year to
6.4 percent from a record high of 10.4 percent in 2007.
Budapest's Central Statistical Office said the February drop
may be bigger than any fall Hungary's industry suffered after
the collapse of Communism, although a direct comparison is not
warranted as methodology has changed significantly.
Output in February suffered on a broad-based drop in
exports, especially cars, which fell by around a half.
"Looking ahead, we have no reason to be optimistic as PMIs,
other survey-based leading indicators and order books all hint
at continuing weakness in European industry," MKB analyst Zsolt
Kondrat said.
(Reporting by Balazs Koranyi and Peter Laca; editing by
Patrick Graham)
