ZAGREB, Oct 29 (Hina) - The growth of Croatia's Gross Domestic Product this year is likely to be 3.8 percent, while the GDP in 2003 can rise by 3.4 percent, according to an analysis made by the Raiffeisen Bank Zagreb (RBA).
ZAGREB, Oct 29 (Hina) - The growth of Croatia's Gross Domestic
Product this year is likely to be 3.8 percent, while the GDP in 2003
can rise by 3.4 percent, according to an analysis made by the
Raiffeisen Bank Zagreb (RBA). #L#
The analysis of the macro-economic situation and forecasts
labelled the recent visit of an International Monetary Fund (IMF)
delegation in Croatia as an exceptionally important event for the
Croatian economy.
The current negotiations between Zagreb and the IMF mission on a new
stand-by arrangement ahead of the pre-election year show the
government has decided to retain the macro-economic stability
which has been present in Croatia for nine years, according to the
RBA analysis.
An agreement with the IMF, which should last one year, is of key
importance for the reduction of the fiscal deficit, and will make it
possible for Croatia to have unimpeded access to the international
capital market and retain the current BBB investment rating, i.e.
Baa3.
Foreign investment offices emphasise the importance of the stand-
by arrangement with the IMF, and expect Croatia to achieve positive
macro-economic results. The fiscal situation will be the only
subject of a detailed discussion with the IMF.
The IMF is likely to define new fiscal objectives for the
consolidated general state budget, the analysis read.
According to available parameters and in light of the government's
decision to conclude the stand-by arrangement with the IMF in 2003,
next year, although a pre-election year, will be marked by a strict
fiscal policy.
Major objections in the assessment of the country's economic
situation refer to the implementation of reforms in the fiscal
policy so as to facilitate cuts in the current deficit and the
deficit of the state.
According to the RBA analysis, this year's deficit of the state
budget will account for 6.5 percent of GDP (11 billion kuna or 1.48
billion euros). Next year this deficit is likely to decrease,
accounting for some 5.5 percent of GDP, but such an amount still
requires new loans.
RBA forecasts that in 2003, the growth in GDP will be around 3.4
percent, and its rise will substantially be affected by investments
in road construction. A smaller contribution from personal
consumption is expected in comparison to this year.
(hina) ms sb