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Slovakia to maintain status as Europe's fastest-growing economy

Slovakia's economic growth was 8.7 percent in 1Q08, which was a slowdown from the record-breaking 14.3 percent posted in 4Q07, Poštová Banka analyst Eva Sarázová told the TASR newswire on June 3.

Slovakia's economic growth was 8.7 percent in 1Q08, which was a slowdown from the record-breaking 14.3 percent posted in 4Q07, Poštová Banka analyst Eva Sarázová told the TASR newswire on June 3.

Among other factors, the fast growth in 4Q07 was influenced by exceptional one-time effects.

"he Slovak economy should continue to grow at a fast pace, although the double-digit levels from last year are probably over," said Sarázová.

In 1Q08, the growth of GDP was driven especially by consumption and investments.

"The growth of consumption was secured by year-on-year growth of employment by 2.7 percent, and the growth of real incomes by as much as 6.2 percent," says Sarázová.

Thus for the first time since 2005, the growth of real incomes slightly exceeds the growth of the productivity of work, points out Mária Valachyová from Slovenská Sporitelňa bank.

"Although this is something that speaks well of the cautionary policies of the Slovak central bank (NBS) as well as that of government's budgetary discipline, the growth of real incomes over the past two years has lagged behind the growth of productivity significantly," added Valachyová. "That's why we regard the latest development in relation with the previous period," she added.

Slovakia's Statistics Office estimates the growth of economy for 2008 at 7.9 percent, which is more or less in line with analysts' estimates.

According to Sarázová, Slovakia should also this year thus preserve the fastest economic growth among EU countries, backed by domestic and foreign demand.

"Unlike the first quarter, the structure of the growth in the following quarters of 2008 should be balanced, driven not only by domestic but also foreign demand," she said. TASR

Compiled by Zuzana Vilikovská from press reports
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