(Adds central bank comments)
By Martin Santa
BRATISLAVA, Sept 3 (Reuters) - Slovakia's economic growth
slowed in the second quarter to an annual 7.6 percent, but it
remained one of the best-performing European Union economies and
its 2008 forecast stayed on track, officials said on Wednesday.
The data, a deceleration from the 8.7 percent growth seen in
January to March and the record 10.4 percent full-year growth in
2007, matched a previous flash estimate released last month.
"The data were in line with central bank's expectations,"
central bank Vice Governor Viliam Ostrozlik told Reuters after
the cabinet meeting in central Slovak town of Banska Stiavnica.
In its quarterly forecast, the Slovak Statistics Office said
it expected full-year annual growth of 7.9 percent this year,
while inflation would be 4.1 percent according to local
methodology.
Analysts said the growth data were more or less in line with
expectations.
"Household consumption slowed down as we expected.
Consumption in the first quarter was high, but it has slowed to
a normal level," said Viktor Strba, an analyst at ING.
"In the fourth quarter there will be a slowdown from the
base effect. But (the full-year growth outlook) is reachable."
The growth figures lagged fellow EU newcomer Romania, which
grew 9.3 percent in the second quarter, drawing concerns of
overheating from analysts. But Slovakia beat central European
peers Poland and the Czech Republic, which had 5.8 and 4.5
percent. Regional laggard Hungary was at 2.2 percent.
Ostrozlik said slowing household consumption was a positive
factor in terms of possible future inflation pressure, but he
said the growth structure still needed to be analysed.
"It is positive that gross capital formation in the second
quarter has risen more significantly," he said.
Slovakia, which will join the euro zone on Jan. 1, has had
one of the EU's highest growth rates since 2004, a result of
billions of euros in foreign investment that has produced a boom
in car and electronics production.
There is also a surge in household spending, fuelled by
rising incomes that have allowed consumers in this ex-communist
state of 5.3 million to splash out on items like new cars,
household appliances and luxury apartments for the first time.
"Wage growth in the second quarter was a touch faster than
productivity growth by 0.2 percentage points," Ostrozlik said.
"I see risks in unjustified wage growth ... if it would exceed
productivity growth on a long-term basis."
Slovakia's GDP per head in purchasing power parity is
expected to be 71 percent of the EU average this year.
Fast economic growth has boosted budget revenues, helping
finance the welfare agenda of leftist Prime Minister Robert Fico
and allowing him to cut the fiscal deficit to below the euro
adoption threshold without spending cuts.
(Additional reporting by Mirka Krufova)
(Writing by Martin Santa and Michael Winfrey; Editing by
Hans Peters)
