WARSAW, Nov 7 (Reuters) - Poland will modify anti-inflation policies opposed by the European Union to avoid another dispute with Brussels, the prime minister said on Monday, as the country grapples with price growth not seen since the 1990s.
Warsaw is in a long-running row with the bloc over judicial reforms Brussels say undermine the independence of judges. On Monday Polish daily Dziennik Gazeta Prawna reported that the European Commission was also concerned about VAT cuts on gas and fuel implemented to help consumers cope with inflation.
"Mainly due to the fact that we still do not have agreement with the European Commission... we want to replace (reductions in VAT) with another mechanism," Mateusz Morawiecki told a news conference.
"We don't want to have another open front, further disputes, attacks and threats from the European Commission," he added.
He said that utilities would have to shoulder the cost of keeping prices low, rather than VAT being cut.
Morawiecki said the government would try to keep VAT on key food products at zero.
The current measures were previously extended to the end of the year. Central banker Ludwik Kotecki said earlier in November that inflation may reach 23-24% in 2023 if the measures were not extended.
Inflation was 17.9% in October according to a flash estimate from the statistics office.
Morawiecki said on Monday that inflation should start to fall at the end of the first quarter of 2023 or in the second quarter.
Reporting by Alan Charlish, Pawel Florkiewicz, Marek Strzelecki