Monetary Policy Council claims budget will not allow lowered interest rates

In an official statement about next year's budget, the Monetary Policy Council (RPP) has expressed doubts about the projected economic deficit for 2001. "The increase in GDP will be lower than that planned by the government, while tax revenues have been estimated with too much optimism," its report specifies. The government's projection of 7.2% inflation is one of the few figures corresponding with those of the RPP, which in this case is 6%-8%. In delivering its opinion for the projected budget the RPP was unable to predict the stringency of next year's fiscal policy, and thus, according to the economists, lower interest rates should not be expected in the first quarter of 2001. The government projects GDP growth at 5% based on the slowing pace of the European Union economy, while according to RPP it should be placed at 4.5%. The draft budget currently under consideration in the Sejm is based on bills endorsed by the RPP but not yet passed, so it advises cutting corners should they not be approved."The economic deficit projected at the level of 1.6% [zl.13 billion] should be increased by zl.3.5 billion to include loans coming from abroad," claims RPP. (Puls Biznesu, pp. 1, 5)