Finance Minister predicts dramatic cut in inflation at end of next year

The Polish government expects inflation to fall to 2.5% in the second half of 2005. "We estimate the inflation rate will fall to 2.5 percent in the second half of 2005 given the reversal of negative supply shocks and the restrictive monetary policy," said Finance Minister Mirosław Gronicki. However, the National Bank of Poland's vice president Krzysztof Rybiński was less optimistic and warned that next year's inflation could rise above the official target of 3.5%t. Last week deputy Prime Minister Jerzy Hausner and Finance Minister Jerzy Gronicki met with the board of the Central Bank and declared they were ready for tight and successful cooperation. Chief economist with Bank Handlowy Maciej Krzak claims that the government's prognosis is very probable. He suggested that after July's 4.7% inflation rate a gradual fall seems likely. (Puls Biznesu, p.5; Rzeczpospolita, p.B2) J.J.