Finance Minister Bauc says growth to remain sluggish in first months of 2001

Finance Minister Jaroslaw Bauc told Reuters on Friday that a recent strengthening in the zloty was not sustainable and that economic growth would remain sluggish in the first months of 2001. He also said that he was surprised by third quarter GDP growth of only 3.3% versus 5.2% in the second quarter. "In the fourth quarter GDP growth could be even slower and remain weak in the first months of 2001," Bauc said. He expected the current account deficit, brought under control by tight fiscal and monetary policy last year, to improve slightly before stabilization in the second half of 2001. "Inflation will fall quickly in the first months of 2001 and probably beat our average annual inflation target of 7.2 percent this year", he said, adding that he expects interest rates to fall faster than inflation this year. Meanwhile, Boguslaw Grabowski, a member of the Financial Policy Council (RPP), considered it unlikely that such an action would be taken soon. Not all analysts are optimistic, either, about interest rates falling within the next several months. (Reuters, Parkiet, p.1,3)