Economists are pleased money supply taken out of the inflation equation

Economists are pleased that the money supply remains under control and will not contribute to inflation as in previous years. According to the Monetary Policy Council (RPP) prices in 2000 are going up but only due to increasing food prices and fuel on the world markets. After seven months, the money supply has increased by 5.4% (zl. 14.2 billion) and in 1999 it was 8%. Inflation amounted to 10.2% after June and the RPP may decide to increase interests rates in order to curb it. CDM Pekao S.A. analyst Witold Chusc says. "Higher interest rates will cool down the consumer market first and this remains under control." Macroeconomic data is getting better not including inflation, but for example the current account deficit and money supply. "Companies anyways face serious problems due to high interest rates on bank loans," said Chusc. The increase in the number of loans has dropped from 14.1% over January-July 1999 to 11.3% over the same period this year. (Gazeta Wyborcza, page 21)