* More working days boost March output
* Two MPC members urge pause in rate cuts
* Q1 growth seen at 1-1.5 percent
(Adds deputy finance minister comment, final two paragraphs)
By Dagmara Leszkowicz and Pawel Sobczak
WARSAW, April 20 (Reuters) - Polish industrial output
Output fell by 2.0 percent year-on-year last month against an analysts' forecast of minus 6.5 percent and a revised fall of 14.6 percent for February. In monthly terms, output rose by 15.5 percent, with manufacturing posting a strong rebound.
"The data is better than expected, but it doesn't mean negative trends in the economy have turned around. There were two more working days in March of this year and this boosted production by nearly 10 percentage points," said Piotr Bujak, senior economist at Bank Zachodni WBK in Warsaw.
"At the same time, the data shows Poland is in a better situation than others in the region, where output is contracting much faster."
Poland, the European Union's largest ex-communist economy, is less reliant on exports than smaller neighbours such as the Czech Republic or Hungary.
Data showed the manufacturing sector grew 17.8 percent in month-on-month terms and fell 0.7 percent year-on-year, while the construction sector grew 15.1 percent in monthly terms and 1.2 percent in annual terms.
In other data released on Monday, the statistics office said
Polish producer prices
PAUSE IN RATE CUTS?
Another analyst, Arkadiusz Krzesniak of Deutsche Bank, said a weaker zloty may have also played a role in the better industrial output data.
"The data shows economic growth is not collapsing and that is a positive," he added.
Two members of the central bank's Monetary Policy Council (MPC), both of them opponents of swift rate cuts, seized on the industrial output data as evidence that the Council should pause in its monetary easing campaign launched last November.
"The data confirms that the Monetary Policy Council should pause in its (easing cycle) in both April and May," Marian Noga told Reuters, adding that he believed Poland should see economic growth of 1.5 percent in the first quarter of 2009.
A second MPC member, Dariusz Filar, said keeping the main interest rate at its current level of 3.75 percent might be enough to bring consumer price inflation back to its 2.5 percent target. In March inflation stood at 3.6 percent.
In the latest Reuters poll, a narrow majority of analysts saw the MPC cutting rates by a further 25 basis points when it meets next week. The Council has cut rates by a total of 225 basis points in the current easing campaign.
A third MPC member, Miroslaw Pietrewicz, a strong supporter of rate cuts, said the extent of Poland's economic slowdown still underlined the need for more monetary easing.
Pietrewicz also told Reuters he saw Polish economic growth in the first quarter at "1 percent or slightly less". Analysts have forecast first quarter growth of 1.0 percent and have put growth for the whole of 2009 at 0.8 percent.
MPC member Noga took a more bullish stance, saying he was "almost sure" growth in the first quarter would be 1.5 percent.
Later on Monday, Deputy Finance Minister Dominik Radziwill told Reuters economic growth may slightly exceed the level of 1 percent in the first three months of the year.
"(After industrial output and producer prices) we may look at the Polish economy with cautious optimism and I think that growth in the first quarter may slightly exceed 1 percent," Radziwill said. (Additional reporting by Adrian Krajewski; Writing by Gareth Jones; Editing by Ron Askew/Victoria Main)