NUMBER OF UNEMPLOYED IN MAY SMALLER

ZAGREB, July 9 (Hina) - Even though the official statistics read the number of unemployed persons in Croatia in May dropped by 2.4 percent, mainly due to seasonal employment, the unemployment rate is estimated to amount to about 22 percent by the end of this year according to the Austrian Raiffeisen Zentralbank (RZB) analysis of economic indicators for the central and eastern European countries for July and August. Seasonal employment is not the only effect expected by RZB analysts to take place during summer months. After a month of an almost discontinued growth, kuna, in relation to Euro and German Mark, increased by six per cent. Although kuna stopped growing in July, a further growth is expected because of the tourist season. Should the appreciation of kuna continue, further interventions of the Croatian National Bank (HNB) at foreign currency markets could be expected, namely the purchasing of Euro. According to the RZB analysts, this year tourist season will be better than last year's. This is crucial to Croatia's balance of payments given that foreign trade deficit in the first quarter should partially be covered by revenue from tourism. By the end of this year, the industrial production should increase by four percent in relation to the year before. The industrial production in May increased by 8.2 percent in relation to the same month the year before, while the production in the first five months in 2001 increased by seven percent in relation to the same period in 2000. According to the analysis, it is important that Croatia's Gross Domestic Product (GDP) increased by 4.2 percent in this year's first quarter, mainly because of an increase in personal spending and investments, and a drop in public spending. Croatia's political events that could be of interest to potential investors, as noted by the RZB analysts, include signing a free trade agreement with the EFTA and the Istrian Democratic Assembly's (IDS) leaving the ruling coalition. (hina) it sb