Slovak ind output slows from record, seen solid

...production, data showed on Tuesday, but analysts predicted 
steady increases in key economic sectors throughout the year. 
    Industrial output rose by a real 15.5 percent in February, 
after an annual 17.5 percent jump in January, the Slovak 
Statistics Office said. 
    "Car production, which is the main driver of growth, was 
slightly lower, but I don't see any negative implications." said 
Lucia Steklacova, senior analyst at ING Bank Bratislava. 
    Production in the car industry, the backbone of Slovakia's 
economy, rose by 103 percent on the year, after a record rise of 
by 127 percent in January. 
    The boom in the car sector has accelerated after assembly 
plants of PSA Peugeot Citroen  and Kia Motors Corp. 
 joined a Volkswagen factory  last year. 
    Analysts expected the car sector to speed up later this 
year, while the electronics industry should also contribute to 
overall output growth in 2007. 
    Electronics sector rose by 17.6 percent on the year in 
February, less than 26.4 percent increase seen in January. 
    Industrial output growth underpins Slovakia's solid economic 
fundamentals as the small ex-communist EU member is benefiting 
from foreign investment inflows attracted by low taxes, cheap 
workforce and flexible labour market rules. 
    Separate data showed on Tuesday that construction output 
rose by 25.6 percent on the year in February, after a 24.1 
percent rise in January, while retail sales growth accelerated 
to 4.6 percent, from a weak 0.9 percent rise. 
    Real industrial wages were up 9.1 percent on the year in 
February, the strongest rise in two years. 
    Strong economic growth, which is expected to surpass last 
year's record rise of 8.3 percent in 2007, helps Prime Minister 
Robert Fico finance part of his promises of building a stronger 
welfare state that contributed to his winning 2006 elections. 
    Analysts expect industrial output to maintain solid 
expansion throughout this year, although growth may stay short 
of the record jump seen in January. 
    "Industrial growth should be between 13 and 15 percent in 
the coming months," said Juraj Valachy, an analyst at Tatra 
Banka in Bratislava. "The dominant factor will be the car 
industry, which should contribute 8 to 9 percentage points to 
overall growth."