The Slovak Statistics Office also said full-year 2007 GDP growth was 10.4%, the fastest annual expansion ever, confirming Slovakia’s convergence with more developed European Union states before planned euro adoption in 2009. Both the Q4 and full-year figures were slightly above flash estimates released by the Statistics Office in February, which had shown 14.1 and 10.3% growth rates, respectively.
The Statistics Office said the latest GDP data were influenced by the impact of pre-stocking with cigarettes as distributors boosted stockpiles before an excise tax hike effective from the start of this year. It did not elaborate on the cigarette impact in the latest GDP data, though it had said in the February flash estimate release that the effect on the Q4 figure was 4.4 percentage points.
The Slovak economy has achieved one of the highest growth rates in the EU since joining the bloc in 2004. The main driver of growth are large foreign investment projects, such as new car assembly plants and electronics makers, which have boosted exports.
Growth has also been helped by reviving domestic demand as household consumption rises after years of belt-tightening reforms. Analysts said fast growth did not appear to be creating additional upward pressure on consumer prices and the data were unlikely to spark a monetary policy reaction.
“The structure of economic growth is favorable from the inflation point of view, because final household consumption has slowed down,” Maria Valachyova, the senior analyst at Slovenska Sporitelna, the Slovak unit of Erste Bank told Reuters. “It is quite favorable news in regard to monetary policy.”