The European Commission attributed good results to a massive internal demand. However, it termed „inconsiderable” the improvement of financial situation. Unemployment in Poland will decline to 11% at the end of this year and to 9% a year later, the EC predicted in its report. Home demand will remain the main engine of growth also in 2008, but the pace of that growth will abate to 5.5%.
The EC sees investments growing 18% this year and 14% in 2008. The public finance deficit in 2006 was at 3.9% of the GDP, lower than the expected 4.2%, the EC report says, adding that this year the deficit will decline to 3.4% (the same as predicted by the Polish government last autumn). In 2008 the deficit will further fall to 3.3% of the GDP. Inflation was at 1.3% in 2006, and will rise to 2% in 2007 and 2.5% in 2008, the report says. The EC believes that the Polish central bank will keep inflation in check and it will not surpass 2.5% annually. (people.com.cn)