Balcerowicz to tighten fiscal policies in order to bring interest rates down

Finance Minister Leszek Balcerowicz said yesterday that he would tighten fiscal policy in order to encourage the National Bank of Poland (NBP) to lower interest rates. Balcerowicz said he would propose lowering the budget deficit in the 2001 budget draft. However, Market Economics Research Institute (IBnGR) expert Wojciech Misiag has doubts. He points out that the government will face large spending for labor benefits because of rising unemployment, as well as rising costs of servicing foreign debts due to the expensive dollar. Misiag says that formally the government would not have a problem lowering its spending, but he is worried about public finances. "The government last year proved that it knows how to transfer its expenses to other public institutions. As a result, the deficit of the entire public sector exceeded 3% of GDP last year," he said. (Parkiet, page 12) T.J.