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Slovak GDP Growth Will Help Budget Target, Kazimir Says

Sept. 13 (Bloomberg) -- Slovakia’s economy probably will grow faster than previously predicted, helping the eastern euro-area member trim the budget deficit below the European Union’s limit this year, Finance Minister Peter Kazimir said.

The revised forecast, due to be released next week, will reflect an improvement in the entire euro area, Kazimir said without elaborating. The Slovak government predicted in June that the economy will expand 0.5 percent this year and 2.2 percent in 2014, compared with January projections of a 1.2 percent expansion in 2013 a 2.9 percent a year later.

“We are a small country fully dependent on the German engine,” Kazimir said in an interview in Vilnius, the Lithuanian capital. “Hopefully, we’ll be able to announce better growth and revenue.”

The euro-region economy’s return to growth in the second three months of 2013 following six quarters of declines has fueled exports in countries such as Slovakia. A faster expansion will make it easier for the country to meet its target of reducing the shortfall below the EU’s limit of 3 percent of gross domestic product as early as this year.

Slovakia has exceeded the EU’s budget ceiling since 2009, when the world financial crisis pushed it into a recession. Premier Robert Fico has said meeting the bloc’s fiscal rules is his administration’s priority as he wants to distance the country from ailing euro-sharing nations.

The benchmark Slovak 10-year bond yielded 2.697 percent, or 72 basis points more than similar German Bunds. The spread compares with 83 basis points for euro-area founding member Belgium, which has a better credit rating, and 460 basis points for Slovenia.

To contact the reporters on this story: Radoslav Tomek in Vilnius at rtomek@bloomberg.net; Rebecca Christie in Vilnius at rchristie4@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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