CROATIAN OFFICIALS: IMF SATISFIED WITH ZAGREB'S ECONOMIC RESULTS

WASHINGTON, April 14 (Hina) - The International Monetary Fund is satisfied with Croatia's economic results in 2002 and the first four months of 2003 as well as with the behaviour of the incumbent government that sticks to austerity measures, a vice premier, Slavko Linic said on Sunday in Washington where he led a Croatian delegation at a spring session of the IMF and World Bank over the weekend. #L# The Croatian delegation on Sunday visited the IMF and held talks with its officials on the results of the Croatian economy in the said period and on a stand-by arrangement which Zagreb recently signed with the Fund. "Both sides have expressed satisfaction with last year's results and the developments in the programmes of the stand-by arrangement," Linic said after the talks. He added that his interlocutors were surprised at seeing that the incumbent government and the ruling coalition in Croatia did not exceed the budget in the year before the next parliamentary election. In February the Fund approved the 14-month-long stand-by arrangement, worth USD146 million, to Zagreb with the aim to support the Croatian economic and financial programme by April 2004. The Ivica Racan Cabinet has no intention of using this loan, but is treating it as a measure of caution. The Fund insists on cuts in Croatia's public deficit, restriction of the public spending and better control over investments as well as over costs of the local authorities. All the indicators show that there has been no over-expenditure in any of those items. On the other hand, revenues have been on the increase and therefore negative trends of the deficit and debt are smaller than expected, the Croatian vice premier added. The delegation, which consisted of Linic, Croatian National Bank Vice Governor Boris Vujcic, Deputy Finance Minister Damir Kustrak and Ambassador to Washington, Ivan Grdesic, held talks with the IMF Executive Director, Jeroen Kremers, the European department's director, Michael Deppler and the head of the IMF mission to Croatia, Hans Flickenschild. Vujcic told reporters that the IMF officials were glad to see the development of the situation concerning the stand-by deal. He announced that an IMF delegation would tour Croatia in May and hold talks on "the quantitative criteria for the second half of the arrangement". He said there were no objections to the monetary policy of the central bank, given that it rendered prices in Croatia stable. "We have no fixed rate of exchange, nor are we intending to have it in the future, but we cannot allow too great fluctuations in the rate, either," Vujcic said. (hina) ms