NBP sees low inflation predictions as justification to lower interest rates

The National Bank of Poland (NBP) is satisfied with the 3% preliminary inflation estimates for 2003, announced by Deputy Prime Minister and Finance Minister Marek Belka. The head of the NBP, Leszek Balcerowicz, told the Polish Press Agency (PAP) on Friday that the bank views the estimates as an indicator of cooperation between the government and the central bank. According to Belka, by year's end inflation will fall to less than 4%, allowing the government to lower interest rates without challenging the inflation goal set at 5%, plus or minus 1%, by the Monetary Policy Council (RPP). Although the Finance Ministry and the NBP agree that by May inflation is to drop to 2.5%, NBP estimates have it that at the end of the year it will rise to 4%, while the Ministry claims it will not exceed 4%. (Prawo i Gospodarka, p. 7) K.S.