Lower deficit and growth of 3.5% are keystones in 2003 budget projections

Next year's budget deficit will reach zl. 38.7 billion, or 4.9% of GDP, announced Finance Minister Grzegorz Kolodko yesterday. This means the gap will be lower than this year's zl. 40 billion and the zl. 43 billion Marek Belka, the previous Finance Minister, proposed for 2003 and which the Cabinet had approved just before his resignation. "With a GDP growth forecast of 3.5%, budget revenues will increase by 4.5%, while spending will rise by 2.4% in real terms," said Kolodko. The budget should receive an extra zl. 1.9 billion boost from restructuring fees paid by ailing companies to have their debts written off and from the 7.5% tax to be paid by individuals who disclose income which they had not reported previously. Kolodko believes that GDP growth will increase to 1.8% by the fourth quarter of 2002, and that public debt would not exceed the 50% of GDP threshold this year, but would probably do so next year. Dariusz Rosati, a member of the Monetary Policy Council, said that Kolodko still needs to fully explain his calculations to win over markets. (Gazeta Wyborcza, p. 22; Reuters) T.J.