ZAGREB, may 19 (Hina) - The Croatian state is not in danger of external illiquidity, especially short-term insolvency. One needs to pay special attention to indebtedness and be cautious so that development, new jobs and a foreign
exchange inflow sufficient to cover debts could result from the new indebtedness. This was a joint conclusion of Monday's session of the Committee for Cooperation Between the Croatian National Bank (HNB) and the Finance Ministry.
ZAGREB, may 19 (Hina) - The Croatian state is not in danger of
external illiquidity, especially short-term insolvency. One needs
to pay special attention to indebtedness and be cautious so that
development, new jobs and a foreign exchange inflow sufficient to
cover debts could result from the new indebtedness. This was a joint
conclusion of Monday's session of the Committee for Cooperation
Between the Croatian National Bank (HNB) and the Finance Ministry.
#L#
At a news conference after the session, HNB governor Zeljko
Rohatinski and Finance Minister Mato Crkvenac rebutted frequent
speculation about conflicts of interest of the HNB and ministry
regarding foreign debts.
Crkvenac said all aspects of the debt were under control, adding
that the debt was useful only if directed towards development,
exports and foreign exchange inflow which made its pay-back
possible.
Rohatinski said that according to latest data, foreign debt
amounted to US$16.5 billion. The activities of current mechanisms
for increasing foreign debt, which is not a basis for the future
regular servicing of the existing debt without new indebtedness,
should cease or be slowed down.
According to him, $2.8 billion were up for pay-back in the next two
years annually, including the capital sum and interest.
"There is no danger that the country will not be able to service the
debt regularly, but this is a warning that such situations should be
avoided in the future," Rohatinski said.
Crkvenac said that the state's overall public debt was between 96
and 97 billion kuna, which was about 52 percent of GDP.
The public debt includes the commitments of public companies and
local units, as well as state guarantees which amount to some 17
billion kuna.
The finance minister said that the debt had grown largely because
the state had recognised and paid back more than 12 billion kuna of
debts to companies and citizens in 2000 and 2001.
Crkvenac informed reporters about the very good fiscal situation --
government budgetary revenues were being realised faster and in a
higher amount than planned, while some expenditure would be less
than planned.
He pointed to the fact that the overall state fiscal deficit would
this year be less than the planned five percent of GDP. According to
latest estimates, the fiscal deficit could be 4.6% of GDP or less,
he said.
(hina) lml sb