Balcerowicz forecasts low inflation for 2003 but no room for interest-rate cuts

National Bank of Poland (NBP) governor Leszek Balcerowicz said yesterday that inflation will probably remain benign next year but warned that interest rates do not have much room to fall following a long series of cuts. Balcerowicz said inflation would probably remain below 3% in 2003, comfortably within the bank's 2%-4% target range. The zloty firmed slightly against the dollar and euro on the back of Balcerowicz's comments, which supported the view that Poland's embryonic economic recovery may not rekindle inflation. "This was the 13th rate cut (in this cycle). From 19% we have descended to 7%. It can be assumed that after such a huge series of cuts, rates are at an adequate level, or very near the adequate level, for Poland's economic reality," he said. That reality is rapidly improving according to a forecast announced by Central Statistical Office (GUS) deputy chief Janusz Witkowski, who said the economy probably awakened in July-September when GDP was estimated to have expanded nearly 2% after four straight quarters of growth of less that one percent. "Experts forecast GDP growth at 1.3%-2.0% in the third quarter. Partial data available to us suggest that growth will be closer to the top of this range," Witkowski told reporters in Warsaw. (Prawo i Gospodarka, p. 1; Reuters) A.K.