(Repeats story published on Aug 10)
* Czech Q2 GDP forecast -4.5 pct y/y, -0.4 pct q/q due Aug. 14
* Slovak Q2 GDP forecast -6.1 percent y/y, due Aug. 13
* Slump expected to have bottomed out, risks remain
* Czech poll table []),Slovak table [])
By Mirka Krufova and Martin Santa
PRAGUE/BRATISLAVA (Reuters) - The Czech and Slovak economies
likely hit bottom in the second quarter with record year-on-year
contraction rates as weakening domestic demand added to poor
export performance, Reuters polls showed on Monday.
The Czech Republic, the bigger of the two export-oriented
neighbours hit by the global crisis, will report its gross
domestic product flash estimate on Aug. 14 and analysts saw
economic decline accelerating to 4.5 percent, from 3.4 percent
in the first three months.
But quarterly data will show a 0.4 percent contraction, a
slowdown from the previous three months which saw a 3.4 percent
fall also on the quarterly basis.
Slovakia, which has seen a steeper output decline after it
joined the euro zone in January, is scheduled to report its GDP
flash estimate on Aug. 13, with analysts predicting the fall to
accelerate to 6.1 percent from the first quarter's 5.6 percent.
Hungary, which has suffered the most in the region from the
global financial crisis, will report GDP data on Aug. 13 and a
Reuters poll showed a 7.1 percent contraction there <HUGDP1>.
Like most younger European Union members from eastern
Europe, Czechs and Slovaks have suffered from fading demand for
their exports in the West while household spending has also
crumbled amid rising unemployment.
Analysts said foreign demand would show only slight, if any,
improvement in the second-quarter data, leaving weaker domestic
demand to drag the Czech economy lower.
"A moderate improvement in the second quarter is set to be
seen in net exports and inventory change (reduction of negative
contributions to GDP versus Q1 in year-on-year data)," said
Pavel Sobisek, Chief Economist at UniCredit Bank in Prague.
"In contrast, fixed capital formation may deepen its
contraction and private consumption may swing from growth to
decline."
MILD RECOVERY UNDER WAY
The Czech central bank, which cut interest rates to a record
low of 1.25 percent on Aug. 6, said the economic fall had hit
the bottom in the second quarter and that it expected growth to
start as of now.
Analysts said retail sales data may indicate a further
decline in household spending in the rest of the year, but they
saw signs of what could be reviving foreign demand.
"We think that recovery, or at least stabilisation observed
in Western European economies, will be supportive to Czech
exports, and we expect them to report less negative results in
the second half of 2009 than what was the case of the first six
months of this year," said Radomir Jac, chief analyst at
Generali PPF Asset Management.
The market was slightly more optimistic about full-year
economic performance than the central bank, forecasting an
annual decline of 3.5 percent. The updated central bank
prognosis sees full-year contraction of 3.8 percent.
Eastern neighbour Slovakia, whose fresh euro zone membership
has taken away the positive impact of a weaker currency, will
report worse economic performance driven both by hurting exports
and falling household spending.
"The figure for the second quarter will be the worst this
year," said Robert Prega, an analyst at Tatra Banka in
Bratislava. "The primary shock has fully hit all sectors."
Slovakia is also betting on a recovery in the euro zone,
mainly in Germany, to help fuel its revival.
Although analysts predict a smaller full-year fall than the
finance ministry's conservative forecast of a 6.2 percent
contraction, the economy is likely to erase most of its 6.4
percent real growth from 2008.
(Writing by Peter Laca; editing by Stephen Nisbet)
