UPDATE 1-Slovakia on track to meet euro criteria-officials

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Slovakia is on track to meet all euro entry criteria sustainably despite a jump in inflation and uncertainty about budget methodology, finance ministry and central bank officials said on Tuesday.

Keeping inflation and public spending under control are Slovakia's main challenges in the run-up to euro adoption, planned for 2009.

"We are still convinced that inflation will be within limits according to our forecasts," Finance Minister Jan Pociatek told reporters. "I can also guarantee 100 percent that (the public finance) deficit will not overshoot the plan for this year."

Pociatek stuck to the ministry's October estimate for the 2007 fiscal gap, saying a buffer had been created to meet the euro test. This was in case the EU statistics agency, Eurostat, wanted Slovakia to include debts of the National Highway Company (NDS) on its books.

"We still target the 2007 fiscal deficit at 2.5 percent of GDP (without NDS debts)," he added.

Eurostat told Slovakia in October to include state television and radio debts in public finance figures but left open the question of whether the much bigger losses of the NDS should also be added.

The finance ministry said in October it saw the deficit at 2.7 percent including the NDS debt, still below the 3 percent ceiling for euro applicants.

With the budget in line, inflation is the biggest euro entry test for Slovakia. Rising food prices pushed EU-norm inflation to a 10-month high of 2.4 percent in October.

Central Bank (NBS) Governor Ivan Sramko reiterated Slovakia had a very high chance of meeting all nominal criteria on a sustainable basis.

"We have a lot of good arguments that criteria and economic developments are sustainable," Sramko told a joint news conference with Pociatek after meeting Slovenian Finance Minister Andrej Bajuk.

(Reporting by Martin Dokoupil; editing by David Stamp)

Keywords: SLOVAKIA DEFICIT/FINMIN

[BRATISLAVA/Reuters/Finance.cz]