GDP jumps 9.8% in third quarter

THE ECONOMY grew by a record 9.8 percent in real terms in the third quarter of 2006, according to a flash estimate from the Slovak Statistics Bureau.

In nominal terms, the gross domestic product grew by 13.9 percent in 3Q06 from the same period a year ago to Sk424.9 billion.

The growth was connected largely to a rise in added value in industry and to higher taxes on consumer goods, as well as to continued strong foreign demand and an increase in stores of materials and finished products.

The figures exceeded even the most optimistic forecasts. “This is much higher than we expected,” said VÚB bank analyst Martin Lenko.

The GDP figure also booted the Slovak crown to another historic maximum of 35.715 SKK/EUR, which is over eight percent higher than the exchange rate when Slovakia entered the ERM II “waiting room” for euro adoption on November 24, 2005.

“I think the market players have sensed for several days what the [GDP] numbers were going to be like, which is why the crown has been strengthening since yesterday,” said Unibanka analyst Patrik Malec.

Lenko said that the current growth, following 6.7 percent in the second quarter, makes Slovakia the unequivocal regional leader.

“This kind of growth can only be compared to that of the quickly expanding economies in Asia and the Baltics,” he said.

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