Friday May 9, 01:22 PM
Polish finance ministry sets inflation, growth estimates for 2009 budget
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.
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