Slovak Dep FinMin says higher GDP may cut deficit

BRATISLAVA, Nov 21 (Reuters) - Higher than expected GDP growth in 2006 could lead to a fiscal deficit below the ministry's 2.5 percent of GDP forecast, Slovak Deputy Finance Minister Frantisek Palko said on Tuesday.

He could not rule out that the government could increase 2007 budget spending due to an increased growth outlook, though he would prefer any extra revenues be used to cut the fiscal gap, he told reporters in parliament.

Slovakia posted record high third quarter GDP of 9.8 percent, which the ministry said was likely to prompt an upward revision of its full year growth forecast.

Keeping Slovakia's fiscal deficit in check is a key part of the EU member's drive toward adopting the euro in 2009. Under adoption criteria, the gap must be below 3 percent of GDP.

((Reporting by Peter Laca, editing by Ron Askew; Reuters Messaging: peter.laca.reuters.com@reuters.net; +421 5341 8402))

Keywords: ECONOMY SLOVAKIA FINMIN