Monetary Policy Council welcomes budget, remains tentative about rates cut

The Monetary Policy Council (RPP) welcomed the passage of the 2001 budget bill by the Sejm, but does not consider this fact alone a good enough reason to cut interest rates. "The passage of the budget is no great surprise. It was already clear what it's going to look like after government introduced its amendments," said RPP member Cezary Jozefiak. He added, however, that this does not clear all doubts regarding how tight public finances will be. RPP sees the economic deficit goal of 1.8% of the GDP set in the budget as a real challenge for the government to meet. Another member of the council, Grzegorz Wojtowicz, recalled how the economic deficit of the 2000 budget was increased from 2% of GDP to 2.7% in the second half of the year. RPP is also not getting overly excited about Poland's current account deficit, which dropped from 8.3% in March 2000, to 6.2% at year's end. Boguslaw Grabowski from the council said that a safe level for the economy is 5%. (Puls Biznesu, p.30, Gazeta Wyborcza, p.16, Reuters) T.J.