Minister of Finance warns against deflation

According to the Minister of Finance, there is an increased risk for deflation in the Polish economy. Prices in May did go up by 0.2 percent year-on-year, but they went down by 0.1 percent compared with the previous month, according to a news release in Puls Biznesu. "The fact that prices are not increasing is a benefit to consumers, ... but it creates difficulties in adjusting our projections to the economy," said Minister of Finance, Mateusz Szczurek. "We may have a decrease in prices well through the summer." There is also the added risk of lower GDP growth for the second quarter. The rate of GDP growth for 2014 should reach 3.3 percent and 3.8 percent in 2015.  When asked about the chance to lower the budget deficit below the 3 percent threshold, Szczurek commented that it is an ambitious goal. Using a new methodology for calculating budget deficit, ESA 2010, the current year's budget deficit is prognosed at 3.5 percent.