UPDATE 1-Slovak Q2 GDP growth accelerates to 9.2 pct

...

Slovak economic growth accelerated to 9.2 percent in the second quarter of 2007 from 9.0 percent in the first three months and analysts said economic expansion was healthy and not inflationary.

The figure was slightly below market forecasts of 9.4 percent in a Reuters poll, but analysts saw no negative market impact from the number.

"Gross domestic product growth was influenced mainly by continued foreign demand, along side persistent growth in domestic demand," the Statistics Office said in a brief comment.

The Statistics Office did not release any detailed data in its flash GDP estimate. It is due to publish detailed second quarter figures on September 4.

Analysts said worse-than-expected foreign trade data in the past few months appeared to have had negative impact on second quarter GDP growth.

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 the strong 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 prices and government pressure on utilities to keep energy prices down.

Market watchers said they did not expect any monetary policy reaction to accelerating GDP growth.

"We think the consumption is likely to have shifted more in favour of domestic demand, compared with the first quarter, but we still consider it healthy and not pointing to imminent inflationary risks," said Lucia Steklacova, a senior analyst at ING Bank in Bratislava.

The Slovak crown slightly weakened after GDP data, trading at 33.485 to the euro as of 0715 GMT, from 33.455 earlier in the session. Traders said the move was related to bearish sentiment on global emerging markets rather than the data.

[BRATISLAVA/Reuters/Finance.cz]