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By Martin Dokoupil
BRATISLAVA, Nov 14 (Reuters) - Slovak economic growth should remain strong in the fourth quarter and a spike in consumer prices will not derail the 2009 euro entry target date, central bank (NBS) board member Peter Sevcovic said on Wednesday.
Sevcovic told Reuters in a telephone interview that third quarter growth, reported on Tuesday in the Statistics Bureau's flash estimate at 9.4 percent, was "fabulous".
Sevcovic, who heads the NBS' monetary policy department, said exports were the main driving factor behind GDP growth, but said the bank had to monitor how household consumption changed when a more detailed picture of the GDP structure is known.
"We had slightly lower expectations due to some seasonal factors, but in the light of revised foreign trade ... it is in fact more or less in line with our expectations," he said.
The statistics bureau, which last week reported a 4.7 billion crown ($209.3 million) trade surplus in September, will release detailed GDP data on Nov. 30.
Sevcovic said he saw economic expansion remaining near 9 percent in the final quarter, but said growth would decelerate next year as new car factories of PSA Peugeot Citroen <PEUP.PA> and Kia Motors <000270.KS> will have reached full capacity.
"It looks like it (the fourth quarter GDP growth) will be a figure very close to 9 percent and it is not important if it is 8.6 percent or 9.1 percent," he said.
The central bank did not change its mid-term GDP forecasts at its October policy meeting, expecting growth of 8.9 percent in 2007 and 7.5 percent in 2008.
Sevcovic also said monetary conditions were restrictive enough to keep accelerating inflation, mainly fed by surging food costs, under control, saying there was no risk to miss a euro entry test next spring.
"The monetary conditions are restrictive enough. I personally see no risk that we should not meet the Maastricht criteria as inflation should go up in all the countries not only Slovakia...It looks that we could be as much as 0.7 percentage points below the criteria so there should not be any problem."
Slovakia met its euro entry test, calculated as a 12-month moving average, for the first time ever in August, helped by record low EU-norm inflation of 1.2 percent.
But rising food prices pushed consumer price growth to a 10-month high of 3.3 percent by local standards in October, surprising the market. EU-norm inflation data, watched by the NBS, are due on Nov. 15.
The NBS left its key two-week repo rate at 4.25 percent last month, 25 basis point premium over the euro zone, for the sixth month running as the crown firming in the first quarter tightened monetary screws.
Sevcovic declined to comment on a sharp firming of the crown in the past weeks, but said the bank still saw fading impact of the strong currency on inflation in the coming months.
The crown hit an eight-month high of 32.830 per euro earlier on Wednesday <EURSKK=>, which is its strongest level since NBS' interventions in mid-March. The crown is 5.1 percent up against the euro this year. (Editing by Ron Askew) ((martin.dokoupil@reuters.com; +421 2 5341 8402; Reuters Messaging: martin.dokoupil.reuters.com@reuters.net)) ($1=22.46 Slovak Crown)
Keywords: SLOVAKIA CBANK/SEVCOVIC
