SLOVAKIA'S economy remains one of the European Union's top performers. In the last quarter of 2007, the country's GDP increased by 14.1 percent year-on-year, according to the Slovak Statistical Office's flash estimate, the statistics authority reported.
The record-breaking number is due to a one-off hike of the excise tax on tobacco products and pre-stocking ahead of it, the tax authority said. But even with that tax revenue taken out, the growth still stands at 9.7 percent.
"It is almost a full percentage point more than economists had expected," Marek Gábriš, analyst with the ČSOB Bank, told The Slovak Spectator. "In the Bloomberg and Reuters polls, analysts predicted an 8 to 9-percent increase."
But the higher-than-expected growth was mainly fuelled by the muscular automotive industry, production of engines and transportation means and production in the electro-technical industry, he said.
"The production in these branches has exceeded expectations and I think that will remain the motor of economic growth over the next two years," Gábriš said.
Electro-technical producers Sony and Samsung will start production earlier than planned. Furthermore, Sony plans to shift its logistics centre to Slovakia, Gábriš said.
"And, at the end of 2008 and beginning of next year, there will be another important factor: Hyundai, a sister company of Kia, will start its production in the Czech Republic's Ostrava region, which Kia's plant in Slovakia will supply engines to," Gábriš said.
Engines have the highest added value in cars, which will provide even more momentum for economic growth, Gábriš said.
Martin Lenko, analyst with the VÚB Bank, said that the flash estimate showed that the growth's structure has ample support from domestic and foreign demand as well as added value from the strong production of cars and electronics. The statistics office will release more detailed data on the economic growth on March 4.
Therefore, Gábriš added that any comment on the health of the economy at this point is speculation. Analysts will need the data on household consumption and domestic demand to draw real conclusions, he said.
Gábriš thinks the high growth will continue, albeit at a slower pace.
"Over the next two years, we will stay one of the fastest growing economies in the EU27, and certainly in Central Europe," Gábriš added.
Last year, the Association of Automotive Engineers and Technicians listed Slovakia as a world leader in terms of produced cars per capita.
"In 2006, Slovakia produced only 55 cars per 1,000 people, which got the country ranked 9th in the world," Ján Lešinský, chairman of the association, told the Pravda daily. "Today, Slovakia is at the top, with 106 cars per 1,000 people. The total for all of last year was 570,000 cars."
The Czech Republic is ranked second with 91 cars per 1,000 people, followed by Belgium, Slovenia and Japan, according to the association.
"Next year, we should expand our lead and produce as many as 160 cars per 1,000 people," Lešinský said. "The Czech Republic will remain second with 120."
