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Faster GDP growth in 2Q07 spurred by household consumption

The structure of Slovakia's gross domestic product remains balanced. However, the second-quarter domestic demand, unlike the previous quarter, outweighed foreign demand mainly due to soaring household consumption, analysts surveyed by SLOVAKIA have agreed. The prospects of the country's balanced economy growth remain positive.

The Statistics Office in its revised forecast on September 4 stated that the second quarter GDP accelerated to 9.4 percent from 9.0 percent in the previous quarter.

"The economic growth, which has been far outperforming other economies in the region, was largely driven by household consumption," ČSOB analyst Silvia Čechovičová said.

Household consumption rose to 7.3 percent from 3.4 percent in 2006. Čechovičová attributed people's readiness to spend money to the high growth in real wages, low inflation, and continued favourable developments in the labour market.

In manufacturing, Lucia Steklačová from ING Bank said that the main drivers continue to be standard sectors, namely the production of cars and machines. According to Slovenská Sporiteľňa analyst Mária Valachyová, concerns from the faster consumption growth can be ameliorated by the fact that the growth in real wages was lower than productivity growth. TASR

Compiled by Zuzana Vilikovská from press reports
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