CEE MARKETS-Strong Q1 economic growth data lifts shares, currencies

BUCHAREST, May 17 (Reuters) - Central and eastern European stocks and currencies firmed on Tuesday buoyed by strong first-quarter economic growth, with the Hungarian forint leading gains after hawkish rate comments by a central bank deputy governor. Central Europe's economies roared ahead in the first quarter due partly to robust domestic demand, preliminary GDP data showed, but surging inflation and the impact of the Ukraine war are set to dampen growth later this year. By 0905 GMT, Hungary’s bluechip index led gains among the region’s stocks, up 2.6% on the day. Warsaw’s index was up 1.9%, while Prague’s and Bucharest’s rose 1.4% and 1.0%, respectively. The Hungarian forint was up 0.9% on the day at 307.2000 per euro from its lowest levels since early March hit in Monday’s session, a Budapest-based currency dealer said. Earlier on Tuesday, Deputy central bank Governor Barnabas Virag said a further increase in real interest rates was needed in Hungary to wrestle down inflation over the medium term. Virag, who said last week the aggressive period of rate hikes was over and a more gradual approach can be expected, also said a slowdown in the pace of hikes will not result in a lower interest rate peak than previously planned. Elsewhere in the region, the Czech crown and Polish zloty were each up 0.2% on the day, while the Romanian leu was flat. The region's largest economy, Poland, grew by 8.5% year on year, exceeding expectations for 7.9% growth. Romania's economy expanded 6.5% on the year in the first quarter, sharply above market expectations of 2.2%. Hungary's economy expanded by an annual 8.2% in the first quarter, above analysts' forecasts for 6.9% growth. "As for the outlook, it is not so favourable, however," Erste Bank said in a research note. "The Russian-Ukrainian war and wider level of economic sanctions would not leave the Hungarian economy untouched either from the second quarter onwards. The coming quarters could thus bring a gradual slowdown in annual GDP growth rates." CEE SNAPSHO AT MARKETS T 1224 CET CURRENC IES Latest Previou Daily Change s bid close change in 2022 Czech Hungary 0 0 Polish Romanian Croatian Serbian 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2022 Prague 1316.46 1297.38 +1.47% #VALUE! 00 Budapest 42324.6 41248.0 +2.61% -16.55% 9 2 Warsaw 1802.00 1762.22 +2.26% -20.51% Buchares 12212.1 12098.9 +0.94% -6.50% t 4 2 Ljubljan <.SBITOP 1136.79 1136.81 -0.00% -9.45% a > Zagreb 2083.74 2077.86 +0.28% +0.21% Belgrade <.BELEX1 818.61 817.26 +0.17% -0.26% 5> Sofia 604.32 600.70 +0.60% -4.93% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year s 5-year s s Poland 2-year s 5-year s s FORWARD 3x6 6x9 9x12 3M interba nk Czech 6.80 6.75 6.36 6.03 Rep Hungary 7.99 8.36 8.35 6.81 Poland 7.28 7.39 7.35 6.42 Note: are for ask FRA prices quotes ********************************************* ***************** (Reporting by Luiza Ilie in Bucharest and Gergely Szakacs in Budapest; Editing by Kirsten Donovan)