POLL-Slovak Q2 GDP growth seen accelerating to 9.4 pct

...

* WHEN: 0700 GMT, Aug 14

* GDP growth seen accelerating

By Peter Laca

Slovak economic growth probably accelerated in the second quarter despite a disappointing trade balance, a Reuters poll showed on Monday, with analysts saying robust expansion was not inflationary.

The Reuters poll of 11 analysts showed a median forecast of 9.4 percent gross domestic product growth in the April-June period, which would be above a 9.0 percent rise seen in the first quarter.

The Slovak Statistics Office will publish the preliminary GDP data on Tuesday, and analysts said a strong rise in growth should not trigger monetary policy tightening.

"The structure of growth should be balanced, driven by both domestic and foreign demand," said Maria Valachyova, senior analyst at Slovenska Sporitelna, the Slovak unit of Erste Bank.

"Growth is healthy, and the economy is not showing signs of overheating," Valachyova said.

Slovakia has had one of the fastest growth rates in the European Union since joining the bloc in 2004 as steady foreign investment inflows boosted exports and household spending picked up speed after years of belt-tightening reforms.

Despite strong economic growth, the Slovak inflation rate has fallen this year, hitting record lows of 1.5 percent in May and June, thanks to a firming crown, lower oil cost and government pressure on utilities to keep energy prices down.

Some analysts, however, saw downside risk to GDP forecasts because of a worse-than-expected foreign trade balance in the second quarter.

"Preliminary second quarter GDP figures will show Slovakia's economy performance is in excellent condition," said Miroslav Plojhar, a JP Morgan economist.

"However, we expect GDP growth to slow down to 8.0 percent from 9.0 percent in the first quarter, based on available macro indicators from the second quarter, mainly trade balance."

The growing economy has been boosting state budget revenues and helping leftist Prime Minister Robert Fico finance part of the welfare agenda that helped him win a 2006 election.

Fico is trying to secure funds for social spending, such as bonuses for pensioners, while he must also cut the fiscal deficit below 3.0 percent of GDP this year to meet the government goal of adopting the euro in 2009.

[BRATISLAVA/Reuters/Finance.cz]