INSTANT VIEW 3-Slovak prelim Q4 GDP easily beats fcasts

    The Slovak economy grew by a 
much faster-than-expected 9.5 percent, year-on-year, in the 
fourth quarter, the Slovak Statistics Office said on Tuesday in 
a preliminary estimate of gross domestic product (GDP) data. 
     
KEY POINTS 
 GDP                  Q4/06 (estimate)   Q3/06     Q4/06 fcast 
 (pct change y/y)         +9.5           +9.8        +8.1 
 
- The Statistics Office does not release detailed data in its 
flash GDP estimate. 
- Fourth quarter GDP in nominal prices was 438.4 billion Slovak 
crowns ($16.41 billion), and 334.5 billion crowns in real 
prices. 
     
COMMENTARY 
    ANALYSTS, 4CASTWEB, LONDON 
    "While the full breakdown is not available yet, we expect 
export and domestic demand are again the most likely factors 
behind strong Q4 (growth). The same factors are expected to push 
GDP growth to 8.2% in 2007 according to the NBS (central bank) 
forecast. The latest data is positive for the crown and 
reinforces our view that the NBS will not be in a hurry to cut 
rates soon." 
     
    LUCIA STEKLACOVA, SENIOR ANALYST, ING BANK, BRATISLAVA 
    "One-off effects such as warm weather and accelerating 
construction output likely influenced growth in the fourth 
quarter. 
    "Inflation figures will be the key (for interest rate 
settings). The structure of the GDP data might not indicate 
demand-led inflation pressures and net exports will dominate. 
But we don't see room for lower interest rates until in the 
third quarter of the year." 
     
MARKET REACTION 
    The Slovak crown  showed little reaction to the 
data, trading at 34.605 to the euro at 0825 GMT. 
     
BACKGROUND 
- The third-quarter figure showed the fastest Slovak real GDP 
growth ever. 
- The Slovak economy has been showing the highest growth rates 
among the four largest new EU members from central Europe over 
the past few years. 
- GDP growth has been helped by reviving domestic demand as 
households consumption rises after years of belt-tightening 
reforms. 
- Investments have also increased in the past year, mainly 
thanks to large project such as car factories of French PSA 
Peugeot  and South Korean Kia Motors . 
     
LINKS: 
- For further details on past data, Reuters 3000 Xtra users can 
click on the Slovak Statistics Office's website: 
http://wwww.statistics.sk/webdata/english/index2_a.htm  
     
- For LIVE Slovak economic data releases, click on...... 
- Schedule of upcoming indicator releases............ 
- Summary of short-term economic data forecasts...... 
 
- Stories on Slovak currency moves........................[SKK/] 
- Slovak speed money guide .............................. 
- Slovak benchmark state bond prices ................. 
- Slovak forward money market rates .................... 
  

[BRATISLAVA/Reuters/Finance.cz]