Analyst says lower industrial output unlikely to prompt faster rates cut

Poland's unadjusted industrial output fell 2.2% in December versus the previous year and was 1.4% lower than the previous month, the Central Statistical Office (GUS) announced Thursday. "Taking into consideration the fact that during December last year there were four less working days than in 1999, the result may be seen as positive," said ING Barings analyst Maciej Reluga. "While the macroeconomic data indicate a slowdown in the economy and lower domestic demand, the year-on-year fall in itself is unlikely to create additional pressure on the Monetary Policy Council (RPP) to loosen interest rates faster," said Monika Kubik-Kwiatkowska, an economist from S&P MMS in Frankfurt. Analysts have no doubt that industrial output will continue to grow at a slower pace, in turn slowing down the entire economy. James Owen from Societe Generale said he thought the output data may convince the RPP to decrease interest rates in the first quarter. According to analysts, current policies on controlled growth of salaries and money supply support decreasing rates. (Reuters, Gazeta Wyborcza, pp. 1, 26) M.M.