* Export recovery may be faster, could take rates up sooner
* No need to hike by year-end
* C.banker Janacek, Governor Singer fine with crown level
(Adds quotes, background, Singer)
By Jan Lopatka
VIENNA, Oct 12 (Reuters) - Czech interest rates may rise sooner than the bank's current forecast implies if data show a faster-than-expected, export-driven recovery, Czech central bank board member Kamil Janacek said on Tuesday. But Janacek told the Reuters Central European Investment Summit in Vienna there was no need to hike borrowing costs before the end of the year, and said the bank needed to see third quarter gross domestic product growth and other data.
He and central bank chief Miroslav Singer, who spoke in Prague, both said the corporate sector could cope with the crown currency's strength.
The Czechs have held rates at an all-time low of 0.75 percent since May as the economy slowly finds its way out of last year's recession and the crown currency firms.
Janacek said strong August import data should translate into a pick-up in fixed investments, and that forward-looking data as well as anecdotal evidence from companies showed a strong rise in orders.
"It is clear that if the recovery of Czech exports is faster, surely we are prepared to increase rates, also faster," he said. "But not this year, of course. It's not the case of this year." ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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The bank's quarterly forecast, up for revision in November, sees interest rate stability until mid-2011, and gradual growth from then on.
Central bank board member Eva Zamrazilova, a long-term colleague of Janacek in the private sector, cast the sole vote for an interest rate hike at the bank's September meeting.
The bank's current forecast sees 1.8 percent GDP growth next year, but is among the most conservative outlooks for the Czech economy.
"The forward-looking indicators are more optimistic than they were 2-3 months ago," Janacek said. "Surely we will revise our forecasts at the end of this year, perhaps upwards if this positive data continues."
Janacek said he was not overly worried about the impact of government fiscal consolidation effort on growth, despite cuts in investment and wages aimed at narrowing the budget deficit to 4.6 percent next year from 5.3 percent expected in 2010.
"Even within the board, we are divided (on the impact of consolidation). Economists are divided on the impact... this can even overcome the negative short-term effects and provoke the beginning of investment activities," he said.
Janacek said he saw some upside risks to inflation due to commodity prices, a possible hike in electricity costs, and a possible rise in wages.
NOT WORRIED BY CROWN STRENGTH
Janacek and Governor Singer said companies could live with the stronger crown, which has firmed by 7.5 percent against the euro this year and is the region's best performing currency.
"Not the recent move, not the level (is a problem). It is not so strong as to provoke a problem both from monetary policy and from exporters at this moment," said Janacek.
Singer told a conference in Prague: "Foreign trade does not give, for the time being, too many signals that the exchange rate would be unsustainable."
The unit was trading at 24.506 per euro at 1338 GMT, 0.1 percent up on the day. The three-month average was 25.022, a touch stronger than the central bank's forecast of 25.3 for the third quarter. (Additional reporting by Michael Winfrey and Sebastian Tong; editing by Stephen Nisbet)