IMF COMPLETES SECOND REVIEW ON CROATIA

WASHINGTON, Nov 13 (Hina) - The International Monetary Fund's Executive Board on Wednesday completed its second report on economic indicators in Croatia under the 14-month Stand-By Arrangement between Zagreb and the Fund. #L# According to a press release issued by the IMF, "in completing the review, the Executive Board granted the Republic of Croatia's request for waivers for the non-observance of four quantitative performance criteria relating to the consolidated central government budget, central government arrears, and net usable international reserves and net domestic assets of the Croatian National Bank". The stand-by deal, amounting to about US$151 million was approved in February this year. The Croatian authorities continue to treat the arrangement as precautionary and do not intend to draw the available financing. After Wednesday's meeting of the Executive Board, Anne Krueger, First Deputy Managing Director and Acting Chair, said that "Croatia continues to enjoy robust economic growth, price stability, and rising international reserves. Since the first stand-by review, real GDP growth has been higher and retail price inflation lower than expected." She, however, warned about the still-wide external current account deficit, and urged the Croatian government "to pursue prudent macroeconomic policies, in addition to further structural reforms, to sustain this good economic performance." Krueger was cited as saying that "to this end, the authorities need to continue efforts at fiscal consolidation and maintaining a tight monetary policy, within an appropriately reformed monetary control framework". She went on to say that the incumbent government was on a path to achieve this its general government deficit target in 2003, and added that the authorities had so far resisted pressures during the election campaign to raise spending. (hina) ms