Predictions generally positive for economic growth, according to Reuters poll

The economy is seen slowly gathering pace in the second half of the year, while the central bank (NBP) is expected to hold rates unchanged in October despite low inflation, a monthly Reuters poll showed yesterday. Despite the gradual economic recovery, GDP is seen increasing only 2.7% next year, much below the 3.5% rate envisaged by the government in its 2003 budget draft. GDP growth, stuck below one percent since early last year, is seen at 1.1 percent in all of 2002. The poll showed that most analysts expect faster economic growth to create little price pressure in the near-term, with inflation seen holding flat at a post-communist low of 1.2% in September. Benign price pressure is seen continuing around the end of the year. Only a moderate uptick to 1.5%, below the central bank's 2% to 4% end-year target, is forecast for December. Lower-than-expected price pressure is seen creating room for further easing in interest rates by a total of 50 basis points before the end of the year. But the Monetary Policy Council (RPP), which has shaved four percentage points off the main rate this year alone, is expected to hold on for at least another month before cutting again. "The central bank is likely to pause this month after last month's easing, particularly after it criticized the government's budget draft," said Dariusz Kowalczyk, analyst at Standard & Poor's MMS in Frankfurt. "But with low price pressure there is definitely room to lower real rates before the end of the year," he added. (Reuters) A.K.