FINANCE MINISTER ANNOUNCES REBALANCE OF BUDGET

ZAGREB, Sept 25 (Hina) - The Croatian Finance Ministry will propose a rebalance of this year's budget which should cover the increased expenditure amounting to about 0.178 billion euros, Finance Minister Mato Crkvenac reported on Wednesday. He nevertheless added that some items would realise a saving which will be more than the amount required so the total expenditure will be less than determined for the budget and so the rebalance actually means decreasing the total expenditure. #L# The proposed budget rebalance and the budget basis for next year were presented by Crkvenac at a meeting of the ruling coalition and a discussion on the matter is expected in the government at its session on Thursday. In a statement to the press after the meeting, Crkvenac explained that expenditure for salaries in the army, police, education, increased allowances for welfare and obligations, such as jubilee awards, would amount to 0.178 billion euros more than initially planned. However, the intended rebalance, with savings on some items such as material expenses, various services, investment maintenance etc. would be more than 0.184 billion euros. Such savings would be greater than the expenditure for salaries which would therefore decrease total expenditure and the budget deficit Crkvenac said. The proposed budget for next year is founded on an additional reduction of the deficit and debts. According to Crkvenac the deficit of the central state would be reduced from this year's 4.2 percent of the GDP to 2.6 percent while the general state deficit would be reduced from 5.9 percent to 4.9 percent of the GDP. According to Crkvenac, the 2003 budget foresees a certain increase in salaries. Pensions should not be reduced, and priorities remain to be education, science, economy and the start of reforms in agriculture, he said. (hina) sp sb