Lowest inflation in quarter century could lead to lower interest rates soon

Year-on-year inflation in Poland amounted to 3.6% in December, the lowest inflation rate in Poland since 1975. Food prices grew slightly in 2001 and fuel prices went down by 11%, following a worldwide trend. Prices are not expected to grow by much this year, and inflation for 2002, according to analysts, should amount to between 4.5% and 5%. Last year's price increases involved mainly goods and services such as water, natural gas and electric power. Poles also had to pay more in rent, fees for education and medicine. The moderate inflation forecasts for this year suggest that an interest rate decrease is likely as early as this month. Bank analysts expect rates to decrease by 1.5% to 2%. (Rzeczpospolita, p. A1) M.T.