CROATIA ISN'T OVERINDEBTED - DEPUTY FINANCE MINISTER

ZAGREB, June 27 (Hina) - Croatia is not overindebted as the debt totals 96 billion kuna (EUR12.8 bln), which is less than half the Gross Domestic Product, Deputy Finance Minister Damir Kustrak said in parliament on Friday presenting a report on the execution of the state budget in 2002. #L# The external debt amounts to 57 billion kuna (EUR7.6 bln), in which the government has the largest share, alongside eight funds and roads. Last year saw the continuation of a fast economic growth, with the 5.2 percent GDP growth the highest since 1997 and the 2.2 percent inflation the lowest since 1994, said Kustrak. He added a stand-by agreement with the International Monetary Fund had been successfuly closed, while personal spending went up 6.2 and investments 10.1 percent. Goverment spending fell 1.8 percent and all these parametres contributed to a record GDP growth in comparison to other transition countries in Europe, said Kustrak. Industrial production went up 5.5 and retail 13.2 percent, while tourism was up a mere three percent, he said, adding one of the reasons for that were insufficient tourist capacity. The prices of fuel and power went up in 2002 but costs of living fell 1.9 percent, Kustrak said, adding the kuna-euro exchange rate was stable. Average unemployment is below 390,000 and forecasts say it will fall under 300,000 by the end of the year, he said. The average salary last year was 3,720 kuna net (EUR496). Salaries grew about five percent in nominal and about three percent in real value. Kustrak recalled interest on kuna loans was 7.3 percent without the currency clause. Some budgetary revenues recorded a good growth, such as health insurance contributions, which went up 10 percent. Revenue from value added tax was up 11 percent in nominal value and that from profit tax 33 percent. Speaking about liquidity, Kustrak said insolvent companies employed 164,000 in 1999, according to Financial Agency data, while today the figure stands at 34,000. (hina) ha