Merrill Lynch report sees a prosperous 2004 ahead

According to a report by Merrill Lynch (ML) which was made public yesterday, the złoty is currently being traded below its real value, after it lost 14% in value in relation to Euro in 2003. According to bank analysts, next year will see złoty gain strength against the US Dollar, and reach the level of zł. 4.23 per Dollar. This will be caused by the improving trade balance and recent reports concerning the value of GDP. ML analysts estimate that the 2003 trade deficit will amount to 1.8% of GDP, and 1.9% of GDP in 2004. The report also forecasts economic growth of 5.2% in 2004, that is higher than that estimated by the government of 5%. "These are factors which will additionally influence the growth of the economy which is already taking place," announced ML. "First of all the economic recovery in Western Europe has just begun. Second, the benefits of the current low exchange rate will continue. Thirdly, in 2004 the fiscal policy will not be as strict, which could boost GDP growth by 1%-2%," reads the report. (Parkiet, p. 7) A.K.