By Peter Laca
BRATISLAVA, Dec 8 (Reuters) - Slovakia will be hit by the global financial crisis but euro zone entry in January should help it avoid deep wounds suffered by some EU peers outside the euro club, Prime Minister Robert Fico said on Monday.
Turmoil on global financial markets magnified the positive effects of adopting the single European currency, Fico told Reuters in an interview.
"I now consider the decision to adopt the euro as even more important than in 2006 when we confirmed the goal of fulfilling the Maastricht criteria," Fico said.
"When we see how the financial crisis is wrecking some national currencies, how some small countries with open economies are having troubles, we perceive the euro even more positively."
Slovakia, which will become the 16th member of the single currency area in January as the first ex-communist EU member from central Europe, has been spared from a direct impact of the financial turmoil on its banks.
But the small and open economy, relying heavily on exports of cars and electronics, will be hit as economic slowdown curbs demand for its products on key western markets.
The government has already cut its economic growth forecast for 2009, although the revised prediction of a 4.6 percent rise should remain one of the highest expansion rates in the EU.
Fico said a key focus was now to prevent inflation from accelerating after euro adoption, which was a scenario seen in previous euro zone newcomers and a trend feared by many Slovaks.
But slowing economic activity may curb consumer price growth in Slovakia because of cooling consumption.
"We may see a rare phenomenon; that euro adoption is followed by slowing inflation and not by its acceleration," Fico said.
Economic slowdown will also reduce state budget revenues, which forced the government to widen the fiscal deficit target for next year. Fico said spending cuts may be needed to meet the deficit goal if growth falls short of projections.
"If the slowdown is much worse ... the only remaining way is expenditure cuts in areas that are not directly related to our priorities," he said, reiterating the government would not touch planned welfare spending. (Reporting by Peter Laca; editing by Stephen Nisbet)