UPDATE 2-Slovak economy sustains robust growth in Q4

 (adds central bank comments) 
    By Martin Santa 
    Slovakia's real gross 
domestic product grew by a much faster-than-expected 9.5 percent 
in the fourth quarter, data released on Tuesday showed, 
confirming it as one of Europe's hottest economies. 
    The preliminary flash estimate of the fourth quarter GDP, 
published by Statistics Office, came in well above the market 
expectation of an 8.1 percent acceleration, lifting the crown to 
firmer levels against the euro  at 34.605. 
    The flash estimate does not contain any detailed data of the 
economy's structure, but Slovakia has been showing the highest 
growth rates among EU members over the past few years, driven 
mainly by domestic demand and rising car industry investments. 
    "One-off effects such as warm weather and accelerating 
construction output likely influenced growth in the fourth 
quarter," said Lucia Steklacova, a senior analyst at ING Bank, 
in Bratislava. 
    Slovakia is expected to join the ranks of the world's 
fastest growing economies. Growth is expected to accelerate 
further in 2007 on the back of rising exports from new car 
assembly plants that French PSA Peugeot Citroen  and 
South Korean Kia Motors  opened last year. 
    At the end of last month, the central bank updated its 
medium-term economic forecasts predicting full-year 2006 GDP 
growth of 8.2 percent, and central bank board member Peter 
Sevcovic told reporters the fourth quarter figure was in line 
with the bank's expectations. 
    "We had expected a similar number for the fourth quarter, so 
if we look at full-year GDP, it should be very close to 
forecasts by the National Bank of Slovakia," he said. 
    The central bank, which raised interest rates last year to 
curb inflation and safeguard Slovakia's goal of adopting the 
euro in 2009, has said the growth is fuelled by rising 
productivity and is not creating inflation pressures. 
    "It would be too soon to speak about implications, because 
we don't know the exact structure yet," Sevcovic said. 
    "When we see the structure, we will be able to say if the 
structure is in line with our expectations. The flash estimate 
number does not tell us whether there should be a monetary 
policy reaction," he added. 
    The central is widely expected to ease monetary policy later 
this year due to a positive inflation outlook and strong crown. 
    "This (growth figure) should not have a significant impact 
on monetary policy as it is near central bank expectations. We 
see this figure as neutral (for the market)," said Slovenska 
Sporitelna analyst Maria Valachyova. 
  

[BRATISLAVA/Reuters/Finance.cz]