Slovak export growth picked up in February, but accelerating imports pushed the country's trade balance to a slightly bigger than expected shortfall, data showed on Tuesday.
Export growth revived moderately to 14.6 percent on a yearly basis, while import growth nearly doubled over January figures to 11.2 percent last month.
The February trade deficit came in at 0.591 billion crowns, the statistics office said, slightly wider than market expectations of a 0.2 billion gap.
Slovakia showed a revised 1.911 billion surplus in January.
"The important news is that the pace of exports growth is still higher than that of imports," said CSOB analyst Silvia Cechovicova.
Analysts said the main reason behind the lower export growth this year was a high comparative base established in 2003.
They added that the strong crown, which has gained 2.4 percent against the euro since January, has still not hit sales abroad.
Vehicle exports, led by the car industry, continued to expand, rising a cumulative 54.5 percent in January and February over the same period a year earlier.
Machinery accounted for the second largest portion of sales abroad, growing by a cumulative 16.2 percent through end-February, while machine imports, the biggest item in the import basket, rose 17.2 percent year-on-year. The market expects imports to pick up speed in the second half of the year, as foreign firms investing in Slovakia bring in export-boosting technology from abroad and feeble household demand starts to recover.
"We expect imports to outpace exports in the second half of the year, perhaps in autumn, when there should be more imports of investment goods related to a building of a car plant," Cehovicova said.
Analysts expect exports, the main driver behind the future EU state's economic expansion, to lose steam this year but to boom again in around 2006 when two major car investment projects come on line.
Around one third of Slovakia's exports is tied to the flourishing car sector. Its backbone is an assembly plant run by German carmaker Volkswagen outside of Bratislava.
The industry is set to get a further boost in 2006 and 2007, when French PSA Peugeot Citroen and South Korea's Kia Motors plan to launch two plants with output capacity of 300,000-cars-per-year each.
Meanwhile, the central bank cut main interest rates by 50 basis points last week to help revive weak domestic consumption. It also said the move would slow sharp firming on the crown that it says hurts exporters.
Crown players, who often eye the trade statistics, did not react to the data. The crown traded at 40.200/230 per euro on Tuesday, slightly weaker from Monday's closing levels.