* Hungarian cbank gov sees deeper recession in 2009
* Polish cbanker says will cut 2.6 pct growth forecast
* Czech cbank gov says 2.9 pct 2009 growth fcast will be cut
* Romanian cbanker says economy will not contract this year
(Recasts with Hungarian central bank chief)
By Balasz Koranyi and Michael Winfrey
VIENNA/BUDAPEST, Jan 21 (Reuters) - Hungary is headed for a
much deeper recession than previously expected, its central bank
chief said on Wednesday, joining a chorus of policymakers from
the region who said their growth outlooks had become more dire.
Rate setters from Poland, Romania and the Czech Republic
said their economies would perform worse than earlier forecasts
as their biggest export market -- the European Union -- sinks
into recession, domestic demand wanes, and credit dries up.
All except Hungary remained optimistic they could avoid a
contraction after a month that has seen violent protests over
growing economic pain among young people and the middle class in
Lithuania, Bulgaria and Latvia.
But Hungarian central bank Governor Andras Simor said a new
2009 GDP forecast, to be released next month, would likely show
a deeper recession than the bank's previous forecast for a 1.7
percent contraction and the 2.5 percent analysts project.
"Our projection in February will predict a significantly
worse path than this," Simor told a parliamentary committee.
Some analysts have warned recession is on the cards for most
of the EU's eastern members, who have sharply outgrown their
more developed neighbours this decade as they close the
prosperity gap left by half a century of central planning.
Zbigniew Hockuba, a member of the Polish central bank's
management board, told a conference it would be forced to cut
the 2.6 percent forecast for this year, from an expected 5
percent in 2008, when it makes its new forecast next month.
"We know that the February projection that we are just
preparing, ... will be lower," said Hockuba, who is responsible
for the bank's inflation projection but is not on the
rate-setting Monetary Policy Council.
He said price growth, which has sunk in recent months making
it easier for the bank to cut official borrowing costs to
support the economy, was not a serious problem.
Brussels earlier this week forecast Poland's 2009 growth at
2 percent. Deputy Finance Minister Ludwik Kotecki said earlier
on Wednesday that GDP rose 4.8 percent for all of last year.
FORECASTS FALLING
Inflation is slowing rapidly and the export-heavy region is
also seeing a fall in production, while domestic demand has been
hit by weaker bank lending and the prospect of layoffs.
EU non-members are also feeling squeezed. Serb central bank
chief Radovan Jelasic said the governments fresh forecast of 3.5
percent growth for this year may not be realistic [].
"(The projection) looks rather optimistic," Jelasic said.
"We definitely see that the risks are growing regarding the
ability of Serbia to have 3.5 percent GDP increase this year."
Czech central bank Governor Zdenek Tuma offered a similar
assessment and said that new growth forecasts, due next month,
will be lower than its latest ones.
Made in October and released in November, those projected a
base scenario for 2009 growth of 2.9 percent and an alternative,
more pessimistic scenario of 0.5.
"All I can say is that growth will be lower than expected in
October," Tuma said. The European Commission this week forecast
Czech growth at 1.7 percent for this year.
In Romania, one of the economies in the region seen most at
risk due to a high current account deficit, the central bank
expects growth to slow sharply.
But Deputy-Governor Cristian Popa said: "We do not believe
that Romanian growth will enter negative territory."
He said that unlike most central banks in the region, his
remained preoccupied with inflation, although the bank forecast
price growth to slow down in the "foreseeable future".
The European Commission this week forecast Romanian gross
domestic product growth (GDP) will slow to 1.8 percent this
year, from some 8 percent in 2008.
Popa added that a sharp drop in the leu currency, which hit
record lows against the euro this month at 4.3530 per euro
<EURRON=>, was more a feature of pessimism toward the region,
rather than the Romanian economy.
(Reporting by Balazs Koranyi, Peter Laca, Mike Winfrey; editing
by Patrick Graham)
