Hungarian meltdown not a threat to Poland

After the social democrats came to power they increased wages in the state sector, expanded welfare benefits and cut taxes. "There was also some creative accounting.After reading the real figures it turned out that the budget deficit reached 10% of GDP," said PKO BP's chief economist Lukasz Tarnawa. To help balance the budget taxes are being increased, wages are frozen and most public services are becoming more expensive. According to analysts, economic growth in Hungary will fall to 1-2% of GDP and inflation will rise to 7-8% in 2007.According to experts, the Hungarian situation is not a threat to Poland, as the economy is in good health. "If we followed similar polices then in 2-3 years we would find ourselves on the edge," said chief economist adviser at PricewaterhouseCoopers, Witold Orlowski. (Puls Biznesu, p. 1, 4) A.K.