LINIC: IMF POSITIVELY ASSESSES GOVT PROGRAMME OF REFORMS

ZAGREB, March 19 (Hina) - The current stand-by arrangement with the International Monetary Fund (IMF) has shown that Croatia is capable of implementing difficult reforms and that investors no longer need to turn to speculative investments because investments in Croatia will soon be made with interest, Deputy Prime Minister Slavko Linic said on Tuesday, speaking about the benefits of the stand-by arrangement, which expires on May 20. Linic said that due to upcoming reforms the government was considering another arrangement with the IMF. #L# Linic said the most important results of the stand-by arrangement was the fact that public spending was placed under control and that private businesses accounted for a bigger part of the Gross Domestic Product. He added that the IMF positively assessed the government's reform programme. Linic also spoke about the situation in the country after the parliamentary election and change of authority in January 2000 in order to explain why the government decided on the USD250-million arrangement. Economy in that period stagnated due to a sudden decrease of economic growth, the overindebtedness of the state and the fact that public spending accounted for a too large portion of GDP, he said. In cooperation with the IMF, the government has in the meantime implemented reforms, which have been yielding satisfactory results: a growth of GDP, an inflation rate lower than the one projected in the arrangement, a slower rise in prices than the projected one, a faster increase in the Croatian National Bank foreign currency reserves, the continued privatisation, the consolidation of the payment system, and the continuation of the reforms, he said. (hina) sb rml,