GDP to grow 2.1%
Although economic recovery is underway, the finance ministry's projections for GDP growth of 2.3% in the first quarter are overoptimistic, said Janusz Witkowski, deputy president of the Central Statistical Office (GUS). GUS predicted an estimated 2.1% GDP growth in the first quarter of the year compared with 2.8% in the same period in 2002. Good industrial production dynamics are stimulating the country's growth, while the construction industry and trade have yet to show signs of recovery.
Gas deal on hold
Infrastructure minister and deputy prime minister Marek Pol said that he hoped the treasury ministry would approve an annex to a gas supply deal with Russia in early May. The annex, signed by Gazprom and Polish Oil and Gas, is necessary for the multibillion-złoty deal to take effect. Although its approval was planned for the end of February, it was delayed due to widespread criticism of the conditions negotiated by Pol.
Corporate tax cut
in the works
A cut in the corporate income tax rate could boost tax revenues, said deputy finance minister Halina Wasilewska-Trenkner, referring to recently announced plans to reduce the rate from its present 27% to 19%, instead of the smaller 3% cut the ministry previously favored. "We hope that such a radical cut will stimulate investment, and that this will allow for higher revenues from other taxes," she said. Her comments came after finance minister Grzegorz Kołodko said that he would like to see a budget deficit of no more than €9.37 billion (zł. 40 billion) this year despite tax rate cuts.
KGHM predicts profit in 2003
Copper and silver mining giant KGHM Polska Miedź expects to show a consolidated net profit this year after suffering a loss of €50 million (zł. 214 million) in 2002, according to Stanisław Speczik, KGHM's chief executive. The world's seventh largest producer of copper and the second largest in silver output has been making a profit on its core mining business, but has been stuck in the red due to losses at its Telefonia Dialog telecom subsidiary. This year, however, the fixed-line operator is expected to record an operational profit.
