* Trade balances improve in emerging European Union members
* Data readings boost hopes for eastern Europe recovery
* Pace of euro zone recovery still seen main driver
By Radu Marinas
BUCHAREST, Jan 11 (Reuters) - Trade figures improved in a
string of European Union's emerging economies in November,
buoyed by a gradual rebound in the euro zone, with Romania
recording a steep drop in its deficit and Hungary a big surplus.
In export-heavy Slovakia, industrial output rose 1.5 percent
on the year, the first growth since September 2008, after a 5.6
percent drop in October, and it showed a trade surplus of 259
million euros.
The data was helped by weaker currencies that make the cars,
electronics and other products from central and eastern Europe
less expensive for their main export markets, a pick-up in
western European demand, and tight credit in their home markets,
which has suppressed imports.
In Romania, the deficit shrank by 60 percent on the year to
8.7 billion euros ($12.46 billion) in January-November, as
imports fell faster than exports. Imports dropped 34.1 percent
to 35.4 billion euros while exports fell 16 percent.
"The very good performance of exports in November is because
of a weak leu, but also because of the rise of foreign demand
for cars and equipment," said Melania Hancila of Volksbank in
Bucharest.
Romania's leu <EURRON=> and Hungary's forint <EURHUF=> are
down 14 percent and 13 percent respectively since highs hit in
July 2008 before the economic crisis hit central Europe, a
factor that has helped even out external imbalances.
RECOVERY ON TRACK?
Hungary had a trade surplus of 411.3 million euros in
November against 471 million in October. It was slightly worse
than analysts' expectations of a 450 million euro surplus.
In the first 11 months of 2009 trade showed a surplus of 4.2
billion euros versus a 238 million euro gap a year earlier.
Analysts had forecast the improvement, mainly due to signals
of growth in euro zone production and business sentiment data in
the last part of 2009, although they have warned the pace of
recovery could ease due to the drying up of car scrap subsidies
and other stimulus that pushed consumers to spend there.
"The slowing decline in exports reflects the gradual
recovery observed (and also expected) in the Western European
manufacturing cycle, while weak domestic demand continues to
suppress the import side," said Gyorgy Barta of CIB in Budapest.
"The recovery in euro zone-bound exports will be a crucial
driver of any economic recovery in (Hungary)."
Slovakia, a euro member since last year, has not had the
benefit of a weaker currency. But car subsidies helped boost
auto production 16.2 percent from a year ago, the first growth
since September 2008.
"We now expect an improvement. Trends are similar with
industrial production, it goes hand in hand as higher production
means improving exports," said ING Bank analyst Eduard Hagara on
Slovak figures.
Slovakia should emerge as the EU's fastest-growing member in
2010 according to the European Commission which forecasts
expansion of 1.9 percent, while Hungary is expected to record a
smaller contraction of 0.6 percent. Romania is seen growing 1.3
percent.
(Writing by Radu Marinas, editing by Stephen Nisbet)
