Inflation falls to 8.5%, lowest in post-Communist era, further decrease ahead

The Main Statistical Office (GUS) announced yesterday that inflation last year dropped to 8.5%, the lowest level in the post-Communist era. Finance Minister Jaroslaw Bauc considers this great news, while the Ministry predicts that the inflation rate in February will be lower than 8%. Monetary Policy Council (RPP) members maintain that the drop in inflation is the result of monetary policy and the increase in interest rates. Minister Bauc indicated other government action, such as lifting duty on fuel and expansion of duty-free grain quotas. The question remains whether such encouraging performance by the economy will convince the RPP to lower one of the highest interest rates in Europe. RPP member Cezary Jozefiak believes this is not enough, because the RPP's decision will depend largely on the final shape of the state budget. (Gazeta Wyborcza, p.1) A.D.