Slovakia's economy expanded an annual 9.4 percent in the second quarter as growing wages fueled consumer spending and exports continued to rise. Gross domestic product growth in the second quarter of 2007 accelerated from 9 percent in the first, the Slovak Statistical Office said today. This growth rate, which is the second-fastest in the European Union, exceeded a preliminary estimate of 9.2 percent for the second quarter. The Statistical Office said it expects growth for all of 2007 to reach a record 8.8 percent, up from 8.3 percent in 2006.
Household consumption is driving growth, and grew 7.3 percent from the same period year ago, compared with 6.5 percent in the first quarter. The increase in consumer spending has been fuelled by a 4.1 percent growth in average real wages which are in part result of growing labour shortages in the context of employment demand - the economy added 44,000 jobs in 12 months ending June.
Exports of goods and services rose 18 percent in the second quarter, exceeding a 14.1 percent increase in imports. Gross investment - ie including inventories changes, were up 6.8 percent on the year, while investment in property and equipment was up 6.3 percent. Government consumption rose 1.1 percent.
The Slovak central bank has kept its key two-week interest rate unchanged for four months now after cutting it twice this year. The bank said a need for cautious monetary policy remains as the country is striving to tame price growth to qualify for the adoption of the euro in 2009.
The koruna was trading at 33.783 at 9:48 a.m. in Bratislava, down 0.2 percent from yesterday's close of 33.714.
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