D&B EXPECTS FURTHER REDUCTION OF INFLATION IN CROATIA IN 2002

ZAGREB, Feb 8 (Hina) - Croatia's risk profile for February is characterised by last year's growth of the Gross Domestic Product (GDP) and a decrease of an inflation rate while Croatia's credit rating remained the same - DB4d - which places Croatia among countries of moderate risk indicator, read the newest report of the Dun & Bradstreet (D&B) company. Croatia's economy in the first nine months of 2001 expanded by 4.3 percent and according to official data country's inflation rate amounted to 2.6 percent, moderately below D&B forecast of 2.7 percent. The marked reduction of price pressures can be attributed to lower world oil prices, moderate wage growth, the government's decision not to increase excise duties on beverages and tobacco and increased retail competition arising from the entrance of large West European supermarket chain, reads the D&B report. Favourably, the recent moderation of global oil prices is also bringing about appreciable declines in producer prices (producer prices declined by a sizeable 3.1 percent y/y in December) the benefits of which are likely to be passed on the consumer in the form of lower retail prices. Given their expectation of a further reduction of oil prices in 2002, the company decided to further reduce their year- end inflation forecast to 2.3 percent in 2002 down from a previous 2.5 percent. The list of Central and Eastern European countries with the best credit rating - DB2d (countries of low risk) is led by Slovenia and Hungary. The Czech Republic and Poland follow (DB3d) and Estonia with DB3c. Yugoslavia's credit rating is DB6d (countries of high risk). The credit rating of Uzbekistan, Turkmenistan, Tajikistan, Georgia, Belarus and Albania is also DB6d. (hina) it