UPDATE 2-IMF chief downbeat on fcast, welcomes German steps

(Updates with further comment on German stimulus)

By Krisztina Than and Balazs Koranyi

BUDAPEST, Jan 13 (Reuters) - The global economic outlook is worsening and the IMF is likely to cut its growth forecasts sharply, although Germany's stimulus package announced on Tuesday offers some hope, IMF Managing Director Dominique Strauss-Kahn said on Tuesday.

Speaking in Budapest, Strauss-Kahn said the global economy is slowing more than the IMF had previously expected and this has implications for several central and eastern European economies.

Germany on Tuesday detailed its second stimulus package in as many months as grim data from China and Japan highlighted the scale of the crisis and President-elect Barack Obama sought approval to unlock the second half of a $700 billion U.S. package.

"Even if I don't have the precise figures now, I already know (the new forecasts) will show sharp decreases for estimates we have for global growth," Strauss-Kahn told Reuters.

"I'm concerned about the fact that the world, the global economy is slowing down even more than has been the case a few months ago," said Strauss-Kahn.

"We're going to release new forecasts in a few days and they're not optimistic, and the situation all over eastern Europe is (a) bad one not only in Hungary," he added.

Strauss-Kahn welcomed Germany's 50 billion euro fiscal stimulus package but said he needed more time and detail to make a fair evaluation.

"Of course, the new German plan, which comes on top of the rest, makes (us) more comfortable. I have to see more detail of the plans," he said. "Obviously, it's a strong effort made by the German government and it will be very helpful."

In November, the IMF cut its projections for world growth in 2009 to 2.2 percent -- down 0.8 percentage points from an October forecast -- and predicted industrialised economies were headed for the first full-year contraction since World War Two.

Strauss-Kahn said he saw some room for monetary easing in Europe.

"Obviously there's some room in Europe but as you know, the European central bank is much more concerned about inflation than other central banks -… so I can understand that for now, the ECB has been more cautious," he said.

HUNGARY PROGRAMME ON TRACK

Strauss-Kahn said Hungary, which averted financial crisis last October with the help of an IMF-led $25.1 billion rescue package, was making good progress but remained exposed to the global deterioration.

"The programme we established with Hungary is on track and the reason why I came here was to see.... how it goes but I'm rather satisfied with the way it's going," he said after meeting with central bank Governor Andras Simor.

"The situation is worsening in the world, the global economy, so Hungary is not immune to what will happen in the rest of the world and so financial stability is never given," Strauss-Kahn said. "Still effort has to be made."

Hungary's recent rate cuts have been appropriate in light of an expected fall in inflation and a consolidation in markets and further cuts should be gradual and cautious, he said in a statement after the meetings in Budapest.

The bank has cut interest rates by a total of 150 basis points to 10.0 percent in three steps since late November and will meet to decide on rates again on Jan. 19.

(Reporting by Krisztina Than and Balazs Koranyi; editing by Andy Bruce)