🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

UPDATE 1-Polish c.banker sees no threat to 2009 deficit target

Published 04/06/2009, 02:15 AM
Updated 04/06/2009, 02:24 AM
TTEF
-
TGT
-

(Adds more quotes, detail)

WARSAW, April 6 (Reuters) - Poland's central budget deficit may come in at the planned level of 18.2 billion zlotys, the central bank's Monetary Policy Council (MPC) member Halina Wasilewska-Trenkner was quoted as saying on Monday.

"I believe the budget can be closed with the deficit at the planned level," Wasilewska-Trenkner told daily Rzeczpospolita in an interview.

Warsaw vowed to keep the budget gap at 18.2 billion zlotys as set in this year's budget bill despite growing scepticism of some analysts as the slowing economy hits state revenues.

Poland's economy is expected to cool sharply in 2009 to about 1 percent, from 4.8 percent in 2008 and 6.7 percent in 2007. Some analysts say the economy could even contract this year as the country's biggest trade partner, the euro zone, battles recession.

The government has also said the general government deficit, according to European Union methodology and used for euro criteria requirements, would not exceed the ceiling of 3 percent of GDP. Last year, it stood at 2.7 percent.

"However, if it came to amending the budget, this would be no good news, especially if the amendment was due to higher public spending," she said.

The government said it may consider amending the budget at the turn of the first and the second half of the year if economic conditions deteriorate more than expected.

"Increasing the deficit may cause a rise in inflation and therefore reduce the likelihood of lowering rates," she added.

The MPC has slashed borrowing costs by a total of 225 basis points in five moves since November and the main interest rate is now at an all-time low level of 3.75 percent.

"The situation is very dynamic and, in my view, the next interest rate cuts may be risky," she said. "It would be good to wait."

Wasilewska-Trenkner, who has favoured higher rates in the past, also said it was advisable to hold fire on rates for a while to better judge the economy.

"There are no signs right now that would suggest a rate hike. But this should not be interpreted as a signal there will be more cuts. I don't know if we will be able to afford this (cuts)," she said.

"I can imagine a situation in which we will be raising rates in the coming months." (Writing by Gabriela Baczynska; Editing by Kim Coghill)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.