IMF report sees disastrous state of public finances as Achilles heel

According to a report published by the International Monetary Fund on Friday about the condition of the Polish economy, the most promising data concerns growing industrial output, falling inflation and rising exports. The major threat is the current state of public finances. It is also very likely that the budget deficit might grow to 5% or even 6% of GDP. According to IMF representatives in Poland, the concepts of former Finance Minister Grzegorz Kołodko were going in the right direction, but only if they were carried out in full. If the government manages to lower the CIT rate to 19%, then the country will become one of states with the lowest level of corporate tax in Europe. "As a result of this move, foreign investors should be attracted to Poland, as without the lower taxes they would place their money elsewhere," said Rudolf Lang, of investment bank Goldman Sachs. (Rzeczpospolita, June 21-22, pp. A1, B1-B3) M.M.