Economic think-tank pegs Poland's growth in 2001 at bearish 3%

Independent economic think-tank Centrum Analiz Spoleczno-Ekonomicznych (CASE) announced bearish forecasts for Poland's economic growth prospects yesterday, predicting it will decelerate to some 3% in 2001 from last year's growth of 4.1%. Compared to the government's 4.5% GDP target and market consensus of 4.1% growth, the forecast, based on the assumption that the budget deficit will not be trimmed down enough to allow for a significant lowering of the country's exorbitantly high interest rates, is rather pessimistic. "The possibility of fast economic growth has been exhausted. Faster growth is possible only if the budget deficit is reduced and the labor market is made more flexible," said Andrzej Bratkowski, CASE's chief economist. The government is seeking to reduce the budget's broad economic deficit to 1.8% this year from 2.7% last year, but experts believe this will be very unlikely in light of the upcoming parliamentary elections in the fall. CASE added that slower GDP growth and an anticipated drop in oil prices will have a positive affect on inflation, lowering it to 6.7% in December 2001 and 5.8% in 2002. The Monetary Policy Council (RPP) intends to curb inflation to between 6%-8% in December. (Reuters; Puls Biznesu, p.35)