ZAGREB, June 13 (Hina) - The International Monetary Fund (IMF) recommended to the Croatian government to speed up the implementation of its policy given that there is only 16 months of its mandate remaining. The Social Democratic
Party's bench presented in parliament on Thursday the preliminary conclusions made by the IMF following a recent two-week working visit to Croatia.
ZAGREB, June 13 (Hina) - The International Monetary Fund (IMF)
recommended to the Croatian government to speed up the
implementation of its policy given that there is only 16 months of
its mandate remaining. The Social Democratic Party's bench
presented in parliament on Thursday the preliminary conclusions
made by the IMF following a recent two-week working visit to
Croatia. #L#
In the conclusions it is stressed, amongst else, that consultations
with social partners are welcome, but that these should not slow
down the decision-making process.
The IMF further warns of the need to decrease expenditure, given
that the share of public expenditure in Gross Domestic Product is
still much higher than in other European transition economies.
Decreasing the fiscal deficit remains the most significant
objective for fiscal policy as the main instrument of the
macroeconomic policy in Croatia, the IMF document notes.
The document further recommends a decrease in the number of
employees in the public service as well as reforms in defence. These
should be implemented without delay. The IMF welcomes the decreased
number of employees in the health sector which should be
implemented by the end of 2002. The IMF further notes that reforms
in the public service and education would add to greater efficiency
in the medium term.
In its conclusions the IMF document notes that it is necessary to
continue with further reforms in the first column of pension
insurance, including, amongst else, an increase in the age for
eligibility for retirement. Expenditure in health could be
decreased, the IMF believes and says that it is necessary to
decrease the amount spent on sick leave, for example by making the
first day of sick leave be without pay.
As a result of the implementation of such an ambitious programme as
the construction of highways, capital expenditure will increase
significantly in 2002 and it is expected that this will remain the
situation for the next few years. Even though the majority of this
year's fiscal deficit will largely depend on how fast highway
construction programmes are implemented, any delay in the
execution could only increase the deficit in the next few years, the
IMF notes.
In view of statistical data indicating that new jobs are only being
created in the private sector, the IMF stresses that it is necessary
to accelerate the process of privatising public companies.
(hina) sp sb