Croatia's delegation is led by Finance Minister Ivan Suker.
"Croatia's delegation, led by Minister Suker, is meeting IMF officials this week in Washington so as to continue talks on the first revision of the stand by arrangement," spokeswoman for the IMF Lucie Mboto Fouda said.
"The talks will particularly focu on the revision of the 2005 budget, which is being drafted by the Croatian Government," the spokeswoman said.
During their visit to Croatia in early June, IMF representatives called on the Croatian Government to come as close as it can to the wanted budgetary deficit of 3.7 percent of Gross Domestic Product, envisaged by the stand by deal
The Finance Ministry will forward to the government this week a proposed revised budget for this year, which envisages reallocating funds worth around one billion kuna. The Ministry will also propose measures to bring the budgetary deficit to 4-4.2 percent of GDP, ministry officials said at a press briefing on Saturday.
The revised budget and the proposed measures, which are expected to yield long-term results, will be discussed by IMF officials and the Finance Ministry delegation, which is on a visit to Washington.
The revised budget is aimed at reducing material expenses by 437 million kuna, government subsidies are expected to be cut by 140 million kuna, and other types of government assistance and subsidies will be reduced by around 400 million, which totals around one billion kuna.
These funds would be reallocated for pensions (470 million), salaries (313 million), other payments (120 million) and government incentives for citizens saving to take a housing loan (80 million).
The proposed measures refer to amending laws on health insurance, government-subsidised saving for housing purposes and government incentives, to amending the Employment Action Plan, and to pensions.
The same measures are recommended by the IMF.
The spokeswoman for the IMF said that after the talks, scheduled to end on Wednesday, the Croatian delegation and IMF representatives would hold a news conference.