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Slovak GDP, Wages Grow More in 2006

Slovakia's gross domestic product was expected to grow by 7.7 percent this year, 1.2 percent more than previous estimates, the government Statistics Office said Thursday.

The GDP growth was also expected to continue in the first quarter of 2007, the agency said in a statement.

"Slovak economy grew by a record 9.8 percent year-on-year in the third quarter, after a 6.7 percent year-on-year growth in the second quarter," the statement said.

The growth in the third quarter was driven mainly by consumer goods and investments.

The December inflation rate will reach 4.3 percent, the statement said. Previous estimates set December inflation at 4 percent.

Earlier this year, economists in Slovakia said they were concerned about inflation, which recorded a 20-month high in August at an annual 5.1 percent. They have estimated a 12-month inflation rate of 2.8 percent as of March 2008, when Slovakia's bid to switch to the euro currency will likely be filed.

The inflation rate of countries who want to adopt the euro currency in 2009 must be within 1.5 percentage points of the average of the three EU nations with the slowest price growth.

The average monthly wage was expected to rise by 7.8 percent year-on-year to 18,750 Slovak crowns (euro535, US$696) in 2006, the statement said. The statistics office also said that the unemployment rate was expected to drop to 13.6 percent by the end of the year compared with 16.2 percent in 2005.

Prime Minister Robert Fico's government coalition, comprised of socialists and nationalists, is struggling to balance its campaign pledges to boost social spending with a need to reduce the budget deficit to 3 percent of gross domestic product in 2007 to meet the European Union's criteria for the adoption of the euro.

Both Fico and his Finance Minister Jan Pociatek have repeatedly said they will focus their efforts on meeting the 2009 deadline.