* Hungarian, Czech Q3 economic shrinkage slows
* Trade better, household consumption weak
* Analysts point to possible dip in recovery
By Jana Mlcochova
PRAGUE, Dec 9 (Reuters) - The contraction in the Czech and
Hungarian economies slowed in the third quarter as a pick-up in
Western demand partially offset weakening household consumption,
putting the countries on a recovery path.
Official releases on Wednesday confirmed preliminary Czech
gross domestic product figures for the third quarter but revised
initial Hungarian GDP data slightly downwards.
The two small and open central European economies have
suffered as exports dried up on weak Western demand. Government
stimulus programmes in the west have helped restore demand
across Europe, although analysts warn an end to these schemes
will result in yet another dip in output.
The Czech economy rose by 0.8 percent in the third quarter
from the previous three-month period. On an annual basis, the
economy fell by a real 4.1 percent between July and September.
"(The quarterly) growth was mainly due to fiscal stimuli
abroad," said Jan Vejmelek, a head of economic research and
strategy at Komercni Banka.
"But the latest data from abroad, mainly from Germany, show
that the end of fiscal stimuli will mean one more wave of
cooling in economic activity, which in the Czech economy will
show through weaker quarter-on-quarter growth already in the
fourth quarter 2009."
He added there was a risk the economy could again decline in
quarterly terms in the first three months of 2010.
Czechs clawed out of a recession in the second quarter when
the economy showed quarterly growth after two consecutive
quarter-on-quarter falls.
The Hungarian economy contracted by an annual 7.1 percent in
the third quarter <HUGDP=ECI> based on unadjusted and
calendar-adjusted data, less than a preliminary estimate for a
7.2 percent decline.
On a quarterly basis, it shrank by 1.8 percent after a
revised 1.9 percent fall in the second quarter, the sixth
successive quarterly fall for the economy.
The moderate improvement came from a modest recovery in the
industrial sector as Western demand picked up.
"Net exports may be the only GDP component that could, at
least partially, compensate for the feeble performance of nearly
all other GDP components," said Gyorgy Barta, an analyst at CIB.
"On the other hand, the expected loss in growth momentum in
Western Europe in Q1 could again begin to affect our exports
negatively (although not to the same extent as it had late last
year and earlier this year)."
Hungary's economy is expected to shrink at a steeper rate
than most other regional economies. The government forecasts a
decline of 6.7 percent for this year and a further -0.6 percent
in 2010.
The Czech central bank cut its forecast for the 2009 GDP to
a contraction of 4.4 percent from 3.8 percent in its staff
forecast released in November. It upped an outlook for 2010,
predicting a 1.4 percent growth, above 0.7 percent seen earlier.
Board member Eva Zamrazilova told Reuters on Tuesday the GDP
data and inflation data also released on Wednesday would be
important for the next rate decision due on Dec. 16.
[]
November consumer inflation was up 0.5 percent year on year,
above the bank's expectations for 0.1 percent, which analysts
said eneded talk of a rate cut.
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(Reporting by Jana Mlcochova; Editing by Victoria Main)
