EBRD warns of hard landing unless govenment takes painful steps

According to the analysts of the London-based bank, the first symptoms of the slowing economy are already visible. Despite 6.4% GDP growth in H1, it is forecasting that the economy will grow by 5.5% for the whole 2004. The economy is fuelled by exports and growing internal consumption, but investment increase is very weak. According to EBRD analysts record high unemployment is the result of the substantial number of people receiving health benefits - 13% of the potential workforce - and hidden unemployment in rural areas. Rigorous labor regulations, high personal taxes and costs of social benefits are also impeding the willingness to employ new workers. (Rzeczpospolita, p. B2) M.M.