* 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
* Bulgarian GDP down 6.2 pct yr/yr
(Adds Bulgarian figures, Polish reference)
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 flurry of Q4 GDP data released this morning paint a
pretty grim picture," Capital Economics said in a note.
"Most countries, with the notable exception of Slovakia,
appear to have contracted on a quarterly basis and there is
little here to change our view that the recovery in Emerging
Europe will ultimately disappoint."
The Czech economy shrank 0.6 percent over the previous three
months, much worse than analysts' forecast for a 0.8 percent
rise and ending a six-month run of accelerating growth.
[]. The most pessimistic estimate in Reuters
polling of analysts had been a 0.4 percent fall. <CZ/ECON17>
Year-on-year, gross domestic product fell 4.2 percent
year-on-year in real terms in the fourth quarter, and the
full-year contraction 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."
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. []
Poland, the region's biggest economy by far, last month
reported year-on-year growth of 1.7 percent for all of 2009.
OTHER DATA MIXED
Romania also undershot forecasts, shrinking 1.5 percent in
the fourth quarter, defying expectations of a 0.1 percent
expansion and dashing hopes 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 pointed 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."
In Bulgaria, the economy shrank 6.2 percent for the quarter
and 5.1 percent for the full year, exceeding the government's
forecast of a 4.9 percent fall.
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,
although analysts said it was largely due to revisions in back
data. []
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 showed strong improvement, but its
2.0 percent expansion still 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)
