Slovak Nov trade gap widens, output growth solid

...new car makers gradually increase production.

The Statistics Office said the trade deficit reached 9.25 billion crowns ($346.3 million) in November, after a revised October gap of 5.48 billion crowns. The November deficit was well above market prediction of 2.3 billion crowns.

"The structure from the previous month shows imports slowed down in the third quarter, compared with the first half, and we think this is still the main story," said ING Bank senior analyst Lucia Steklacova.

"Therefore, the implication from the negative figure is not to panic and wait for improvement in the external balance from January 2007," Steklacova added.

Data showed export growth slowed to 18.4 percent, year-on-year, from 30.1 percent recorded in October. Imports were up by 22.6 percent, after 26.9 percent growth in October. The office will release detailed trade data next month.

In a separate release, data showed industrial output rose by real 9.8 percent year-on-year in November.

Industrial production slowed from October's 11.1 percent, and it was also below market forecast of 11.8 percent increase, but analysts said the result was still strong growth.

"We could see such a growth pace in the next few months, because of the auto industry output, but also due to production in the engineering and electric industries," said Slovenska Sporitelna senior analyst Maria Valachyova.

Thursday's data showed car production, the backbone of Slovakia's economy, surged by 51.2 percent from a year ago in November, after a 40.9 percent jump in October.

Ex-communist Slovakia is expected to become the world's top car maker per capita with a planned annual output of 840,000 units by 2010, helping to narrow the trade deficit.

Analysts said the full-year trade deficit could hit 90 billion crowns in 2006, compared with a 76 billion gap in 2005, while they predicted the shortfall to shrink to around 30 billion crowns this year.

[BRATISLAVA/Reuters/Finance.cz]