IMF forecasts lower GDP growth for Poland, suggests a cut in interest rates

The International Monetary Fund (IMF) forecasts Poland's GDP growth to reach 4.5% rather than 5.1% as assumed in the budget draft. The IMF recommends that Poland's Monetary Policy Council (RPP) consider lowering interest rates as one of the ways to spur growth. In the IMF's opinion, the inflation forecast of 6%-8% makes such a move possible. According to Susan Schadler of the IMF, its overall evaluation of Polish economy is positive. The IMF is concerned, however, about the unemployment level. According to government analysis, it may rise to 14.9% at the end of the next year. As a possible solution, the IMF suggests changing the Labor Code for greater elasticity of the market. Despite the lower growth rate, the IMF considers maintaining the economic deficit of the 2001 budget at the level of 1.6% possible, provided that expenditures are cut. (Prawo i Gospodarka, p.2) M.K.