Slovak GDP shows record growth in Q3, crown rises

    BRATISLAVA, Nov 15 (Reuters) - The Slovak economy rose by a 
record 9.8 percent in the third quarter of 2006, data showed on 
Wednesday, pushing the crown currency to all-time highs against 
the euro. 
    The preliminary flash estimate of the third quarter GDP, 
released by the Statistics Office, was well above the market 
forecast of a 6.6 percent rise, and boosted the crown to 35.720 
to the euro. 
    The flash estimate does not contain any details of the 
economy's structure, but Slovakia has been showing one of the 
highest growth rates in the European Union since it joined it in 
2004, thanks to accelerating household consumption and rising 
investments to the key automotive industry. 
    "On the consumption side, GDP growth was influenced mainly 
by continued foreign demand and growth in inventories of 
materials and finished products," the Statistics Office said. 
    Because of the lack of any breakdown of the preliminary GDP 
figure, analysts were at odds over the implications of strong 
economic growth. 
    "This figure means that growth is healthy, and surprisingly 
high imports in the previous months will translate into exports 
in the future, and not into consumption, as some may have 
feared," said ING Bank senior economist Lucia Steklacova. 
    "If growth is based on a healthy structure, the crown will 
firm further, and there will not be an urgent need to raise 
interest rates," Steklacova added. 
    But Danske Bank analysts said in a report the strong GDP 
readings meant the central bank will have to tighten monetary 
policy further to tame upward pressure on shop prices. 
    "Further rate hikes are very, very likely. The Slovak 
economy is obviously overheating. A boom-bust scenario looks 
more and more likely," Danske Bank said in a flash comment. 
    The central bank has raised interest rates by 175 basis 
points in four steps this year to fend off inflation risks 
stemming from high energy prices and rising domestic demand. 
 ((Reporting by Peter Laca, editing by Chris Pizzey; Reuters 
Messaging: peter.laca.reuters.com@reuters.net; +40 21 315 
8320;)) 
  Keywords: ECONOMY SLOVAKIA GROWTH