Government pegs economic deficit at 1.8% in amended budget draft

In a late-night session Thursday last week, the government approved the amended version of the 2001 budget bill, widening the economic deficit to 1.8% of GDP from 1.6%, which Finance Minister Jaroslaw Bauc later said may lead the Monetary Policy Council to delay the lowering of Poland's interest rates. According to the amended legislation, the 2001 economic growth forecast has been reduced from 5.1% to 4.5%; average annual inflation is now targeted at 7% instead of 7.2%; and the unemployment rate has been increased from 14.9% to 15.4%. According to the finance ministry, the changes came about partly as a result of the revenues generated from the sale of UMTS licenses, and also due to macroeconomic assumptions. The change in these macroeconomic assumptions has caused the need to correct budget assumptions. As a result, the budget deficit is predicted to reach 2.6% of GDP instead of 2.7% originally planned in November. The budget's expected revenue had to be lowered by about zl.2.6 billion because of the slower growth forecast. The Sejm is to vote on the budget bill early in February. (Rzeczpospolita, Jan. 13,14, p.B1; Reuters)