PREVIEW-Slovak Nov inflation seen rebounding from 1-yr low

WHAT: Nov. EU-norm inflation

WHEN: Release date: Dec. 15, 0800 GMT

* Rebound not seen worrying central bank.

By Martin Dokoupil

BRATISLAVA, Dec 5 (Reuters) - Slovak inflation probably rebounded from a one-year low in November, but the central bank (NBS) should keep rates on hold this month due to an improved inflation outlook, a Reuters poll showed on Tuesday.

The NBS has raised the official lending costs by 175 basis points this year to curb price pressures and keep Slovakia on track to adopt the euro in 2009.

But the bank left the key two-week rate at 4.75 percent in November, for the second month in a row, as the crown's rally to record highs against the euro tightened monetary conditions.

The Reuters survey of 10 analysts suggested the EU-norm annual inflation rate accelerated to 3.4 percent in November, from 3.1 percent the previous month.

On the month, prices were forecast to have grown by 0.3 percent, after staying flat in October.

"A rise in natural gas prices should pull inflation up, but cheaper fuel should limit the month-on-month increase," said Slovenska Sporitelna senior analyst Maria Valachyova.

Annual inflation peaked at 5.0 percent in July and August, propelled mainly by higher prices of gas, electricity and heating. EU-norm inflation is the yardstick of price growth for the NBS.

Analysts have shifted their expectations to no change in interest rates at the monetary policy meeting on Dec. 19 after the energy market regulator said last week household gas prices would be cut and electricity costs kept flat in 2007.

Apart from the energy cost rulings, a crown rise by 5.7 percent against the euro in the past three months plays an important role in market expectations of flat rates.

"The pace of economic growth is calling for a rate hike but a further increase would send the crown much stronger and could tighten monetary conditions too much," said Miroslav Plojhar, analyst at Citigroup in Prague.

"Inflation will fall below 3 percent in January, so it is hard to imagine higher rates in such an environment," he said.

NBS Board member Peter Sevcovic said last week the gas ruling alone would push inflation below the bank's forecast, and that it will raise the chances of meeting the euro conditions.

The NBS expects average annual inflation of 2.5 percent in spring 2008, below its 2.8 percent forecast of the reference rate for euro membership assessment.

Some analysts said a rate hike was still possible if the crown weakened, or if details of a record 9.8 percent GDP growth in the third quarter showed a significant rise in household spending.

(For a table with forecasts please click on [ID:nL05574214])

((Editing by Gerrard Raven; Reuters Messaging: martin.dokoupil.reuters.com@reuters.net; +421 2 5341 8402))

Keywords: SLOVAKIA ECONOMY/INFLATION