* Czech Republic returns to contraction in 4th quarter
* Romania still in recession in Q4, worse than forecast
* Hungary slows pace of contraction, beats prognosis
* Slovakia rises 2.0 pct on quarter, below expectations
By Michael Winfrey
PRAGUE, Feb 12 (Reuters) - The economic recovery shuddered to a halt in the Czech Republic at the end of 2009, while Hungary and Romania remained mired in recession as the European Union's emerging east ended the year deep in the red.
Following disappointing figures showing the region's main export market Germany had stagnated from October to December, the data from the EU newcomers was a cold shower for economists who had expected the region's recovery to accelerate.
It added to concerns over headwinds facing the entire region this year that include the end to a restocking cycle in Germany that will hit manufacturers, banks keeping a tight lid on lending, and belt-tightening by some governments who are trying to rein in budget deficits and runaway debt.
The Czech economy dropped 0.6 percent over the previous three months, widely missing analysts' forecast for a 0.8 percent rise and ending a six-month run of accelerating growth. [
]The number was completely out of the range predicted by analysts in a Reuter poll, where the most pessimistic estimate was for a 0.4 percent quarterly drop. <CZ/ECON17>
Czech gross domestic product fell 4.2 percent year-on-year in real terms in the fourth quarter, and the full-year drop was 4.3 percent.
"Czech preliminary GDP data is a proper shocker," said Piotr Matys, an analyst from 4CAST.
"This is undoubtedly very disappointing data sending a warning signal that the Czech recovery could be very bumpy and ... may prove unsustainable."
The Czech Republic's biggest manufacturer, Volkswagen <VOWG.DE> unit Skoda Auto said on Thursday it would cut production of its best selling car starting in March. [
]That follows an end to a car scrapping subsidy in Germany that pushed the company's sales to a record high in 2009.
The GDP data pushed the crown lower and helped lift the zloty in Poland -- the only EU state to avoid a contraction last year -- to a week high as it outpaced its peers. [
]
OTHER DATA MIXED
Romania also undershot forecasts, shrinking 1.5 percent in the fourth quarter. That defied analysts expectations of a 0.1 percent expansion and dashed hopes that the Balkan state of 22 million had climbed out of a deep recession at the end of 2009.
The economy was 6.6 percent smaller from October to December versus a year earlier and contracted 7.2 percent for the full year. In parallel data, January inflation jumped to 5.2 percent in January, due to a rise in cigarette prices.
Market watchers say the data point to further monetary policy easing in the coming months -- the main official rate of 7.0 percent is the EU's highest -- although inflation still remained a problem.
"This data complicates monetary policy even more," said Nicolaie Alexandru-Chidesciuc, from ING Bank in Bucharest. "Rates should be cut further, but inflation isn't allowing it. This could determine a slowdown in monetary easing."
Hungary, among central Europe's worst-off economies and the beneficiary of an IMF bailout, fared better, slowing its pace of contraction to 0.4 percent versus the previous three months. [
]That was an improvement from the 1.2 percent drop seen in the third quarter. On an annual basis, fourth quarter GDP was down 4 percent, beating analysts' expectations of a 5 percent fall.
Like Romania, Hungary's 6.0 percent main interest rate is high compared with other EU states but it too saw inflation jump in January to 6.4 percent on the back of a jump in excise taxes on fuels and higher food prices.
Euro zone member Slovakia was the best of the lot, but analysts cautioned that a strong 2.0 percent acceleration in the second quarter, could face difficulty.
The expansion missed expectations of a 2.2 percent rise. Fourth quarter gross domestic product fell 2.7 percent when compared with a year earlier. [
] (Reporting by Reuters bureaus; editing by Patrick Graham)