RPP under pressure to cut rates after lower-than-expected September inflation

A small 0.3% rise in the consumer price index in September brought the annual inflation level in the month down to just 4.3%, the lowest it has been in the post-1989 period. The figure, announced by the Central Statistical Office (GUS), is lower than forecast by Finance Ministry experts and analysts. According to chief economist of BIG Bank Gdanski, Miroslaw Gronicki, annual inflation may well fall below the 4% mark this month. Inflation levels of under 5%, that is below the target for next year set by the Monetary Policy Council (RPP), will put pressure on the RPP to cut interest rates, maybe later in October, by as much as 1.5 - 2 basic points. However, economists warn that the low inflation level may be difficult to sustain, given the instability of the economic situation. (Prawo i Gospodarka, pp. 1, 2; Gazeta Wyborcza, p. 17; Reuters) M.T.