Is the Finance Ministry overly optimistic about the economy in 2004?

GDP should increase by 4-5% this year, with the highest forecasts announced traditionally by the analysts from the Finance Ministry. "This should be attributed to the growth in the economy itself, as well as a boost resulting from increased state sp ending, which is likely to increase GDP growth by 1.2-1.4%," said Maciej Krzak, chief economist of Bank Handlowy. Other analysts forecast a slightly lower growth, which according to IBnGR and CASE will amount to 4.1%. "I agree that revival is rather steady, but government estimates seem to be exaggerated. This is especially true of corporate investments whose growth will be lower than 12.2% envisaged by the Finance Ministry. This is the result of t he high budget deficit, which will impede access to loans for companies," s aid Maciej Grabowski from IBnGR. Rafał Antczak from CASE stressed that the main threats to economic growth result from the difficult situation of public finances, especially due to the enormous borrowing needs of the government and rising public debt. (Puls Biznesu, p. 6) M.M