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Economic growth slowed to 8.7 percent in Q1

SLOVAKIA'S year-on-year economic growth decelerated in the first quarter of 2008, ending at 8.7 percent, which is far from the record 14.3 percent GDP reported in the final quarter of 2007. The Slovak Statistics Office published this information as a flash estimate on May 15.

SLOVAKIA'S year-on-year economic growth decelerated in the first quarter of 2008, ending at 8.7 percent, which is far from the record 14.3 percent GDP reported in the final quarter of 2007.
The Slovak Statistics Office published this information as a flash estimate on May 15.

Even so, the Slovak economy remains one of the most productive in the European Union, the ČTK newswire wrote.

Analysts attribute the slowdown to the final effects of the launch of large investment projects, in particular in the automotive industry.

Still, first quarter results moderately exceeded analysts' estimate, who had predicted growth of 8.6 percent.

"The growth was propelled in particular by domestic demand," Mária Valachyová, an analyst with Slovenská Sporiteľňa bank told ČTK.

Traders contributed to the record GDP in the final quarter of 2007 by pre-stocking a huge amount of cigarettes prior to an increase in the excise tax.

"Yet economic growth remained very strong without this influence, thanks to which we might revise our estimate of the whole year upwards from the original 6.7 percent," said Valachyová.

The National Bank of Slovakia predicts the economy will expand 7.4 percent in 2008.

The strong growth has already been reflected in the labour market. The number of employees rose 2.7 percent year-on-year during the first quarter to 2.21 million. Seasonally adjusted employment increased by 2.5 percent.

"Such a high increase will fill the needs of the Slovak market very quickly," warned Michal Páleník from the non-governmental Institute of Employment.

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