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GDP sets more records

SLOVAKIA'S economy grew by a record 8.2 percent in 2006, according to preliminary data released by the Statistics Bureau, buoyed by fourth quarter real GDP growth of 9.5 percent.

SLOVAKIA'S economy grew by a record 8.2 percent in 2006, according to preliminary data released by the Statistics Bureau, buoyed by fourth quarter real GDP growth of 9.5 percent.

The growth data, which came on top of a 9.8 percent rise in 3Q06, confirmed the latest estimates by the National Bank of Slovakia (NBS). Analysts expect that GDP growth should increase even further in 2007, the Sme daily wrote.

The high growth was due the roll-out of new investments in Slovakia in the automotive and hi-tech sectors, strong exports and rising employment.

"I think we may find that the main factor was the electro-tech sector," said Ján Tóth, the main economist with ING Bank.

The average wage in the national economy also rose by Sk1,500 last year to Sk18,750 a month.

"The rise in domestic consumption was mostly due to the fact that more people were working, while wages were rising faster especially in the state sector because it was an election year, and consumers continued to take loans," Tóth said.

NBS Governor Ivan Šramko said that while it was still too early to comment on the figures, it appeared that the dramatic growth - a record for Slovakia since its 1993 founding - was not leading to economic overheating, and was based on macroeconomic fundamentals.

The Slovak currency firmed sharply on the news by 40 basis points to 34.33 SKK/EUR.

Šramko added that it was a positive sign that inflation in Slovakia was not rising significantly with the high GDP growth.

According to the NBS governor, the preliminary GDP estimates for the fourth quarter of 2006 confirmed that high growth can coincide with low inflation.

"Of course, this cannot be maintained in the medium or long term, as much as that would be beneficial for Slovakia," Šramko said.

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