CROATIA'S CREDIT RATING POSITIVELY AFFECTED BY GROWTH OF GDP IN 2002

ZAGREB, May 7 (Hina) - Croatia's investment risk profile in May is marked by last month's publishing of preliminary data on a 5.2% increase in GDP in 2002 and its credit rating remains at DB4d, the Zagreb company BonLine said quoting the latest report of the credit rating company Dun&Bradstreet. #L# The risk profile DB4d, which Croatia has been given for a number of months, marks countries of moderate investment risk but with a significant degree of risk for investment returns. Analysts with D&B have changed their estimate about the growth of Croatia's GDP in 2003 from a previous 3.8 to 4.2% as well as the estimated growth of GDP in 2004, from 4.2 to 4.5%. Analysing preliminary data on last year's GDP, the analysts point to a 6.1% increase in personal spending and a 10.1% increase in capital invested into fixed assets. Based on the first economic indicators at the start of this year, it is estimated that domestic demand will continue growing. This estimate is supported by data on a drop in unemployment (14.3% at the annual level) and an increase in income (the average salary has increased by 6.3%). As regards medium-term forecasts, the analysts expect domestic production to start decreasing slightly given the government's plans to limit budgetary funds for infrastructure projects and salaries in the public sector in 2003. Croatia is 10th on D&B's list of 25 monitored countries. Hungary and Slovenia have been heading the list of monitored countries for a long period of time, with a credit rating of DB2d which marks countries of low investment risk. At the bottom of the list, with DB6d rating, are Serbia and Montenegro, Bosnia-Herzegovina, Uzbekistan, Turkmenistan, Tajikistan, Georgia, Belorussia and Albania. (hina) rml