IMF supports Kolodko's planned tax reforms

The International Monetary Fund yesterday praised a blueprint for fiscal reform unveiled by Finance Minister Grzegorz Kolodko but was downbeat about the outlook for growth. "We welcome these proposals and see this as the beginning of a constructive strategy for fiscal reform," the IMF's Susan Schadler told a news conference after a twice-yearly mission to Warsaw. She was referring to sweeping reforms proposed by Kolodko to prepare public finances for the costs of joining the EU. Kolodko's strategy, to be discussed by the Cabinet on March 18, would eliminate tax breaks to make room for tax cuts - goals Schadler said the IMF "gladly" supported. But, in keeping its forecast of 2.75% growth in GDP this year, the IMF was less upbeat than Kolodko, who is counting on 3.5% growth to hit his fiscal targets and cut the 19% jobless rate. Schadler predicted that Poland's debt would reach 52% of GDP this year but added that, "slightly larger fiscal deficits and increases in debt ratios are not unusual in the early stage of an upturn." (Reuters) M.M.