GOVERNMENT SOURCES SAY FOREIGN DEBT USED FOR INVESTMENTS

ZAGREB, April 25 (Hina) - Croatia's increased foreign debt is being spent on investments and the building of infrastructure, and projects in road-building, instalment of gas pipe-lines, energy supply and railways are profitable and will pay back the invested funds, so paying off the foreign debt will not burden the budget, government sources say. A government official said that at the moment, foreign debt was not that much of a concern because of the question on what the funds were being spent. The funds are used for investments and infrastructure projects, and data indicate that these investments will yield returns, says the official. Officials of the Croatian National Bank yesterday warned about the problems of foreign debt and deficit in the balance of payments current account. They believe that a wider discussion should be held in Croatia on the issue. Croatia's overall debt at the end of last year slightly exceeded US$15.2 billion and its share in GDP rose to 68.1% in 2002, while at the end of February, foreign debt was as much as $16.5 billion. Government sources say that the new foreign debt is not used for spending, but investments. Every investment into oil, gas, the transmission of electricity and road construction is economically justified and their future returns will be sufficient to pay back the loans. One should not fear that the investments will be paid from the government budget, they say. (hina) lml sb