Slovak Oct trade surplus seen improving outlook

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Slovakia's foreign trade was in surplus for the second consecutive month in October, data showed on Wednesday, and analysts said strong exports from key car and electronics industries improved the full-year outlook.

The foreign trade surplus totalled 2.5 billion crowns ($110.9 million) in October, preliminary data from the Slovak Statistics Office said, compared with a revised surplus of 2.6 billion in September.

The forecast in a Reuters survey predicted a 0.9 billion crown gap.

The Statistics Office did not release a detailed breakdown of October trade figures, but analysts said key economic sectors - cars and electronics - probably remained the main drivers of exports. "The data is significantly above market expectations," said Piotr Matys analyst with 4Cast. "The outlook for the trade balance is positive as the car sector is back to full speed after the summer break and continues to fuel exports."

The foreign trade deficit widened in 2006 mainly due to rising imports of equipment needed for large investment projects, such as new car factories of PSA Peugeot Citroen and Kia Motors .

The car assembly plants, together with the fast-growing factory of electronics maker Samsung, now drive Slovakia's exports and its overall economic growth.

The central bank expects the foreign trade gap to shrink to 37 billion crowns this year, from last year's deficit of 75 billion, but some analysts said the shortfall might be even smaller.

"After October foreign trade figures, we see the full-year trade balance showing a gap of 16 billion crowns," said Lucia Sramkova, senior analyst at ING Bank in Bratislava.

Market watchers expected the trade balance to worsen in December due to seasonal factors as consumer imports traditionally rise and car industry production slows near the end of the year.

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(Writing by Martin Santa and Peter Laca)

Keywords: SLOVAKIA ECONOMY/TRADE

[BRATISLAVA/Reuters/Finance.cz]