POLL-Slovak May inflation seen at record low, rates flat

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* WHEN: June 14, June 26

* Inflation seen falling to a record low, key interest rates steady

By Martin Santa

BRATISLAVA, June 6 (Reuters) - Slovak consumer prices rose at a record low pace in May, but the central bank (NBS) will keep interest rates steady this month with euro zone lending costs on the rise, according to a Reuters poll on Wednesday.

Ten analysts polled by Reuters predicted the annual EU-norm inflation rate at 1.7 percent in May, down from the previous all-time low of 2.0 percent in April.

The inflation data are due to be released at 0700 GMT on June 14.

"Inflation will decelerate due to the annual base effect," said Marek Gabris, analyst at CSOB in Bratislava.

Inflation was 4.8 percent year-on-year in May 2006.

On the month, prices were seen up by 0.2 percent, after a 0.3 percent rise in April, driven mainly by increasing fuel and food prices, analysts said.

EU-norm inflation is a key gauge for the NBS, which aims to bring the EU member into the euro zone in 2009.

NBS Governor Ivan Sramko said earlier this week that fast Slovak economic growth, at 9.0 percent in the first quarter, is not fuelling inflation since it is led by exports.

Analysts expect EU-norm inflation below 2 percent by the end of 2007, while the NBS predicts the rate at 1.3 percent in December.

All analysts surveyed expect the NBS to leave the key two-week repo rate at 4.25 percent at its policy meeting on June 26 as it needs to bring Slovak rates in line with the euro zone benchmarks.

The European Central Bank (ECB) is expected to lift its main interest rate by 25 basis points to 4.0 percent later on Wednesday. Investors bet on further tightening to 4.25 percent later in the year.

"Both (Slovak and euro zone) interest rates should match each other by the end of the year," said Maria Valachyova, senior analyst at Slovenska Sporitelna.

The NBS eased pmolicy by a cumulative 50 basis points in two steps in March and April as the strong crown tightened monetary conditions.

(For accompanying table click on [ID:nL06818715])

Keywords: SLOVAKIA ECONOMY/SURVEY