UPDATE 1-Slovak finmin sees 9 pct GDP growth in 2007

...

Slovakia's gross domestic product (GDP) will probably rise by 9 percent this year, more than originally expected, Slovak Finance Minister Jan Pociatek was quoted as saying on Friday.

"When we drew up our budget, we were calculating with 7.1 percent GDP growth, but it will be more -- probably 9 percent," Pociatek said in an interview with Austrian business daily WirtschaftsBlatt.

Slovakia has been one of the fastest growing economies in the European Union in the past two years, thanks to reviving domestic demand and rising investment activities.

Economic growth accelerated to an estimated 8.2 percent in 2006 after car makers PSA Peugeot Citroen and Kia Motors launched production in their new Slovak assembly plants.

Fast economic expansion will boost state budget income this year and help leftist Prime Minister Robert Fico, who replaced a centre-right administration in a June 2006 election, finance his plans for bigger social spending.

The booming economy also bodes well for Slovakia's plan to adopt the euro in 2009 as the country must keep the overall fiscal deficit under 3.0 percent of GDP this year to qualify for the euro zone entry.

"We need to get below 3 percent. The goal is 2.9 percent," Pociatek said. "This includes the costs for the pension reform...which alone is responsible for 1.1 to 1.2 percentage points."

Pociatek also said economic growth was not a threat to inflation, as he expected consumer price growth of less than 2.5 percent at the end of 2007.

"Currently, there is certainly no overheating," he said. ((Writing by Boris Groendahl and Peter Laca, Vienna Newsroom, phone +43 1 531 12-258; editing by David Stamp))

[VIENNA/Reuters/Finance.cz]