Vienna - Slovakia outpaced other Central European economies in the third quarter, posting solid growth while the 15-nation eurozone slid into recession, official data showed Friday.

Neighbouring Czech Republic even posted a slight increase in gross domestic product (GDP), bucking a trend toward slowing growth that has not spared the once rollicking ex-communist economies.

Hungary, saved from the brink of default last month by the International Monetary Fund, saw its economy shrink by 0.1 per cent compared to the second quarter, the government said Friday.

With the fourth quarter also looking bleak, Hungary - once a leader in the region's post-communist transition - may be headed for its second recession in two years.

All of eastern Europe are feeling the pinch after Germany, the region's biggest export market, said Thursday that its economy went into recession by shrinking 0.5 per cent in the third quarter.

That helped pull the entire eurozone into a second consecutive quarter of negative GDP growth, the widely accepted definition of recession, the European Commission said Friday.

But Slovakia, which is set to switch to the euro on January 1, is still riding a boom stoked by foreign carmakers and electronics companies that made it Europe's fastest-growing economy last year.

Its economy grew by 1.5 per cent quarter-on-quarter and at an annual pace of of 7.1 per cent, according to the first official estimate for the three months ending September.

That's half of the all-time high of 14.3 per cent that Slovakia posted in the last quarter of 2007, but far higher than the rest of Europe.

In a sign of healthy consumer spending and borrowing in the nation of 5.4 million, Slovakia last month had the EU's fastest growth in new-car sales. Poland and the Czech Republic were second and third.

The Czech economy grew by 1.0 per cent quarter-on-quarter, up from 0.9 per cent in the second quarter.

Poland, eastern Europe's largest economy, is expected to show a slowdown when it releases third-quarter GDP data in late November

While inflation has eased across the region, the global financial crisis and recession in Europe's richest countries has led officials and analysts to cut growth forecasts.

In Slovakia, the government lowered its 2009 forecast this month to 4.6 per cent from an earlier target of 6.5 per cent.

The Czech central bank on November 6 unexpectedly slashed its benchmark interest rate by 0.75 percentage points to spur the economy.

"The Czech economy remains robust, and among emerging market economies is being perceived as a safe haven," analysts at Austrian bank RZB Group said Friday.

Elsewhere, Serbia's squabbling government said it agreed to cut spending in exchange for a 520-million-dollar credit line from the IMF.

In Slovenia, the only ex-communist nation using the euro, new centre-left Prime Minister Borut Pahor on Friday presented a cabinet that will lead the country through leaner times.

The coalition has pledged fiscal restraint and includes a former central bank governor in a new post to guide market reforms and relations with EU officials in Brussels. (dpa)