UPDATE: Hungary 4Q GDP Surprisingly High; Recession May Be Avoided

--Hungary 4Q GDP growth 1.4% on the year vs 0.8% forecast
--Hungary 4Q GDP up 0.3% on quarter vs revised 0.4% growth 3Q
--Nokia layoffs could weigh on 1Q 2012 growth warns KSH
--Too early to assess Malev bankruptcy impact


BUDAPEST (Dow Jones)--Hungary's economy grew more than expected on an annual basis in the fourth quarter of 2011, data showed Wednesday, a development that suggests the country may avoid a recession this year, said analysts.

Gross domestic product expanded 1.4% in the fourth quarter from a year earlier in unadjusted terms, due to a surge in agricultural output and a stronger-than-expected expansion in construction, KSH said. The figure compares with a rise of 0.8% forecast in a poll of 12 commercial bank economists by Dow Jones Newswires.

Based on adjusted data, GDP grew 0.3% in the fourth quarter from the third quarter, slightly more slowly than a revised growth figure of 0.4% in the previous quarter, KSH said.

Takarekbank analyst Gergely Suppan said the quarterly growth data were a very positive development and may signal that Hungary can avoid a technical recession, or two consecutive quarters of negative GDP.

The Hungarian forint strengthened after the release of the data, rising to HUF287.75 against the euro from HUF291 before the figures.

In 2011 as a whole, unadjusted GDP was up 1.7% on the year, compared with growth of 1.3% in 2010.

"Agricultural output was already clearly massive last year. The real surprise was construction, which has seemingly reached the bottom after five years of continued decline, therefore it didn't hurt the industrial output," KSH statisticians said at the time of the release.

Looking ahead, KSH statistician Peter Szabo said the layoff of 2,300 people announced by Finnish telecommunications equipment maker Nokia Corp. (NOK) last week was likely to have a negative effect of several tenths of a percentage point on GDP growth in the first quarter.

KSH is also assessing the impact of national carrier Malev's bankruptcy, but Szabo said it's very difficult to ascertain the full implications of this development yet.

Economist Suppan said the Malev issue was likely to have a minuscule effect on GDP as the fact the company won't generate any more losses will be offset by an anticipated drop in transit traffic and orders to local suppliers.

Szabo also warned that after last year's bumper harvest figures, GDP in 2012 might be less favorable simply because of the base effect as growth is always calculated relative to the previous year.

"Agriculture has a relatively very small weight within GDP but it adds a lot of uncertainty," Szabo said.