FINANCE MINISTER SPEAKS OPTIMISTICALLY ABOUT NEXT YEAR

ZAGREB, Dec 23 (Hina) - Next year should bring Croatia an economic growth of about five percent, an increase in employment and living standards, greater prospects for the youth, high liquidity of both the state and the economy, the further stabilisation of the financial system and sufficient capital for new projects. #L# We are also expecting a further increase of foreign currency reserves, as well as investments, Croatian Finance Minister Mato Crkvenac said at Monday's news conference. Crkvenac reiterated that the government would next year pay special attention to exports. To this end, the Finance Ministry is preparing tax relief for research and development and the creation of new products in companies, while Croatian Bank for Reconstruction and Development will stimulate exports, production and the creation of new companies' products. State agencies should also provide additional incentives, and the government will particularly back companies which want to become more significant in the region. Next year, when the new stand-by arrangement with the International Monetary Fund will come into effect, should also contribute to the realisation of some of the chief goals of the arrangement -- stopping the increase of the budgetary and state deficit, as well as the state's further indebtedness. Commenting on the state's indebtedness, vice-premier Slavko Linic said that it was evident that most new debts would not burden tax payers. The new debts will be used for investments into economical projects, such as highway construction, which will be financed from own incomes. The government's message concerning increased salaries for next year is clear -- an increase will be possible only through the payment of one-off subsidies, and through changes stipulated by the new Law on Income Tax, Linic said. (hina) lml