Finance Minister: Inflation at 6% this year will threaten budget revenues

"Inflation is falling decidedly faster than we had anticipated and it is already clear that average annual inflation in 2001 will be around 6%," said Finance Minster Jaroslaw Bauc yesterday, voicing concern over the effects this would have on the national budget. He said that the low inflation rate, along with strong exports, could result in lower than expected budget revenues, particularly from indirect taxes, such as the value-added tax (VAT). Analysts are now forecasting average 2001 inflation at 5.8%-6.4%, while the Monetary Policy Council (RPP) target this year is 6%-8%. Meanwhile, the National Bank of Poland (NBP) released good news that savings grew by zl.4.3 billion in February, and that borrowing increased only zl.1.1 billion. RPP welcomed the news, but still sees a risk of reversal of these positive tendencies and remains wary of cutting interest rates this month. (Gazeta Wyborcza, p.21, Reuters) T.J.