UPDATE 1-Slovak current account gap widens in 2006

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Slovakia's current account showed a preliminary deficit of 129.6 billion crowns in 2006, up from a 126.9 billion crown gap the previous year, the central bank said on Tuesday.

The central bank also revised the current account gap for January-November to 122.2 billion crowns, from an originally reported shortfall of 121.3 billion.

The current account has been widening for months driven by strong imports of technology needed for large investment projects in areas such as the automotive industry.

Analysts expect the external balance to improve radically this year driven by the production boost at the new car plants of France's PSA Peugeot Citroen and South Korea's Kia Motors and the contribution of high-tech electrical goods manufacturers.

Peugeot announced earlier in the day that production for 2007 will reach around 180,000 vehicles, nearly quadruple its output last year.

"The year 2007 will be a breakthrough, we expect the current account gap to shrink by 55 billion crowns," said Tatra Banka analyst Robert Prega.

The NBS originally predicted a current account deficit of 104.3 billion crowns for the full year 2006, which it estimates to be 6.7 percent of GDP, while it sees the 2007 deficit narrowing to 70.7 billion crowns or 4.3 percent of GDP.

[BRATISLAVA/Reuters/Finance.cz]