WARSAW (Thomson Financial) - Poland's finance ministry will assume growth of
5.0 percent and average annual inflation of 2.9 percent in its work on next
year's budget, a government source familiar with the initial budget plans said
today.
In line with standard procedure, in early May the ministry proposes basic
macroeconomic assumptions for work on the budget law which will go to parliament
later this year after several months of work by the government.
The assumptions, which are in line with the government's latest convergence
programme for preparing its economy to join the euro, should be approved by
cabinet today, the source said.
Poland's budget deficit this year was set at 27.1 billion zlotys in the
budget act and ministers have promised they will seek to lower the deficit in
nominal terms in 2009.
The Polish central bank's last forecast, made before further interest rate
hikes in February and March, projected inflation would only come back to the
bank's 3.5 percent target at the end of next year.
Policy hawks on the bank's council have said that inflation is likely to
return to its 2.5 percent target at the end of next year, as long as it makes at
least one more small rise in interest rates soon.
Inflation stood at 4.1 percent year-on-year in March. The ministry expects
the economy to grow around 5.5 percent this year.
pawel.sobczak@thomsonreuters.com *48 22 447 2430
pjg/ejp
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