Today's 2001 Budget expected to call for moderate fiscal-policy tightening

Today the Finance Minister Jerzy Bauc will announce the 2001 budget. When he replaced Leszek Balcerowicz as Finance Minister, Bauc said he wanted to maintain a tight fiscal policy and keep the budget deficit below 2% of GDP. It is rumored that Finance Ministry may be considering a budget deficit of 2.3% of GDP. The president of the National Bank of Poland (NBP) Hanna Gronkiewicz-Waltz warns that the deficit should not exceed 2%. "Decreasing capital to 1.5% of GDP is necessary for maintaining public finance at a healthy level," said professor Stanislaw Gomulka. However, J.P. Morgan says Poland does not need to make its fiscal policy tighter, as tax revenue will be higher than predicted. The biggest obstacle in creating a budget for next year will be how to help state-owned companies. Average annual inflation is forecast to be 6.1% and GDP should increase by 5.7%. (Parkiet, page 7) M.M.