BRATISLAVA, Feb 15 (Reuters) - The Slovak economy expanded
as expected by 3.5 percent on the year in the fourth quarter of
2010, slowing from a 3.8 percent rise in the previous quarter,
data showed on Tuesday.
The euro zone country rose by 4.0 percent in full 2010,
slightly below analysts' expectations of a 4.1 percent increase.
Slovaks recorded a 4.8 percent contraction in 2009, as the
global crisis slashed foreign demand in western Europe for its
key export goods such as cars and electronics.
The finance ministry sees the 63-billion-euro economy rising
by 3.4 percent this year, driven by demand in the euro zone,
mainly its key business partner Germany, and growth in
investment.
The central bank has been slightly less optimistic,
predicting a 3.0 percent rise in 2011 as it expects the planned
fiscal consolidation to slow the growth to some extent.
The centre-right government of Iveta Radicova approved a
1.75 billion euro austerity package, including tax hikes, cuts
in public spending, to reign in rising public finance deficit.
Negative risks to growth have mainly been a possible
bursting of a bubble in Asian economies and a negative impact of
Europe's debt crisis.
COMMENTARY:
LUBOMIR KORSNAK, ANALYST, UNICREDIT BANK,
"We expect that growth in the fourth quarter remained
driven mainly by exports, and we could see a continuing trend in
a rebound of investments, as suggested by data on imports."
"Domestic demand remains weak, which could be seen in poor
retail sales data."
"We expect growth to slow to 3.1 percent this year.
MARIA VALACHYOVA, SENIOR ANALYST, SLOVENSKA SPORITELNA
"We expect that the key driver, again, was industrial
production and strong demand from the euro zone, mainly Germany.
As for the consumption side, rise in investments and inventories
provided a contribution to the growth."
"As for the full year of 2010, the growth was in line with
our expectations... We expect the economy to rise by 4.0 percent
this year."
BACKGROUND
- The Statistics Office will publish detailed structure with
final data on March 3.
- Recovery highly export-dependent country has been driven
by upturn in foreign demand, which boosted industrial output.
- Poor retail sales reading show domestic demand remains
weak, putting brakes on growth.
- Slovakia, a euro zone member since January 2009, had been
hit by the global economic downturn as demand for its exports
faded in its main western markets.
LINKS:
- For further details on past data, Reuters 3000 Xtra users can
click on the Slovak Statistics Office's website:
http://wwww.statistics.sk/webdata/english/index2_a.htm
- For LIVE Slovak economic data releases, click on......<ECONSK>
- Schedule of upcoming indicator releases............<SK/ECON09>
- Summary of short-term economic data forecasts......<SK/ECON04>
- Slovak benchmark state bond prices .................<0#SKBMK=>
(Reporting by Martin Santa)
