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Wednesday, March 19, 2008

Polish Growth Forecast At 6 Percent in Q1 2008

Poland's economy may have grown about 6 percent in the first quarter of 2008, according to Deputy Finance Minister Katarzyna Zajdel-Kurowska in Warsaw today..

``Economic statistics for the first months confirm that Poland is resilient to the global economic slowdown,'' Zajdel- Kurowska she told a press conference in Warsaw today. The Polish economy expanded 6.1 percent in the fourth quarter of 2007.

Wage and employment growth are likely to boost the inflation rate and budget revenue, while the ministry doesn't expect this year's spending plan to be fully implemented, she said.

Poland's Monetary Policy Council has raised interest rates six times in the past 11 months on concern that wage growth, outpacing production, will increase labor costs and force companies to lift retail prices. The average corporate wage rose 12.8 percent last month, the fastest pace in eight years.

Zajdel- Kurowska forecast the average inflation rate would rise to at least 3.5 percent, above the government's forecast of 2.3 percent. The main threat to the inflation outlook stems from energy and food prices, as well as rising unit labor costs and potential zloty depreciation if the central bank should ever need to reduce interest rates.

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