(Writes through with analyst quote)
By Michael Winfrey
BRATISLAVA, Dec 31 (Reuters) - A continued boom in car exports helped keep Slovakia's November trade deficit at a fraction of last year's levels, data showed on Wednesday, providing room for crown firming and looser monetary policy.
The November trade gap was 483 million crowns ($14.7 million), compared with a 9.5 billion crown gap in the same month of 2002, the Statistics Office said.
A Reuters survey of analysts taken earlier in December showed the market expecting a trade gap of 2.7 billion crowns.
Analysts have said the racing export performance and slower imports have given the central bank room to ease its monetary policy and allow the crown currency to strengthen.
"Today's figure is positive and better than expectations," said Tatra banka analyst Elizej Macho. "But it wasn't a big surprise, because everyone has gotten used to the data being better than forecasts over the past few months."
The total trade deficit from January to November was 10.9 billion crowns, a mere fraction of the 83.2 billion shortfall from the same period last year.
Analysts said that the trend could cause the full-year gap to register under one percent of GDP, compared to 8.7 percent of GDP when the full-year gap totalled 96 billion crowns last year.
Exports grew by 26.9 percent when compared to November 2002 and after registering a revised 28.3 percent in October.
The car sector, fuelled by a Volkswagen plant near Bratislava and a blossoming auto-part maker network, kept its dominant role in central Europe's fastest growing economy.
Sales abroad of transportation goods rose 76 percent through November to account for nearly a third of Slovak exports.
Import growth accelerated, boosted by a 13.1 percent rise in machinery entering Slovakia, but still only reached 10.2 percent on the year, compared to 5.9 percent growth in October.
Imports have been subdued since the start of the year because of hikes to utility prices and a government measure raising excise taxes that has squeezed household demand as consumers are forced to realign their spending habits.
The stats office also revised its data for the October trade deficit, cutting the figure to 387 million crowns from an originally reported 589 million crowns.
ROOM FOR CUTS, CROWN FIRMING
The central bank ignored calls to slash its main two week repo rate for most of this year, but it surprised the market on December 19 with a 25-basis-point cut that it indicated should bolster flagging demand. The two-week repo rate is six percent.
Macho said the trade gap in 2004 could be wider because of investment inflows. These could include machinery imports for projects like a 750 million euro PSA Peugeot Citroen plant now under construction that should come on line in 2006.
But he said the trade deficit should not prevent looser monetary policy or crown strengthening.
"We expect further rate cuts in the next year... We also expect crown strengthening, but the market may be dominated by the political scene and regional influences which could be limiting factors," he said.
($1=32.92 Slovak crowns)