(Updates with CPI, detail, quotes)
BUDAPEST, March 11 (Reuters) - Hungary's economy contracted faster in the fourth quarter of 2008 than earlier projected and inflation slowed less than expected in February, the Central Statistical Office said on Wednesday.
Hungary's economy shrank by an annual 2.3 percent in the
fourth quarter
Compared to the previous quarter, the economy contracted by 1.2 percent to record its third straight quarterly decline.
Inflation slowed to 3.0 percent in February from 3.1 in January but came in well above expectations for a 2.8 percent rate, on sharply higher fuel prices and rising durables prices after the forint's weakness affected both.
"It's not surprising based on industrial output figures that output fell so significantly and dragged the GDP down," KSH statistician Pal Pozsonyi said. "In all other segments, except for construction, we saw stagnation or modest contraction."
Based on seasonally and calendar-adjusted figures, the economy contracted by 1.3 percent compared to a year earlier, faster than a preliminary estimate for 1 percent.
In all of 2008, Hungary's economy expanded by 0.5 percent after a 1.1 percent rise in 2007.
"Fuel prices have to be singled out as the biggest factor in terms of inflation," KSH statistician Borbala Minary said. "The fuel price rise alone lifted annual inflation by 0.4 percent."
She added that the forint, which fell to new all-time lows versus the euro last week after sharp falls in recent weeks, contributed to inflation, particularly for durable goods.
"For durable goods, it seems that the trend for falling or stagnating prices is gone," Minary said. "Nearly all durable goods are imports and the impact of the forint affects prices in this group. January and February figures already show a rise and this is most likely due to the forint." (Reporting by Balazs Koranyi, editing by Mike Peacock)