IMF EXECUTIVE DIRECTOR VISITS CRO. CENTRAL BANK

ZAGREB, July 3 (Hina) - International Monetary Fund executive director Johannes de Beaufort Wijnholds on Monday visited the Croatian National Bank (HNB) in Zagreb where he and HNB governor Marko Skreb discussed economic and financial events in Croatia, and future cooperation. Wijnholds, the leader of an IMF constituent group of countries which includes Croatia, was mostly interested in the latest economic indicators and the state of the banking sector, HNB said in a statement. According to data at hand, this year's first trimester recorded a four-percent increase in Gross National Product in comparison with the same time last year. It is estimated this year's annual growth rate will revolve around 2.6 percent. An increased net export of goods and services has been considerably contributing to the economic revival, and is expected to bring this year's deficit on the balance-of-payments current account to US$1 billion, or 5.3 percent of GNP. Over recent months, prices have been growing faster than expected, among else, as a result of changes in the tax system, but the coming months are expected to bring more relaxed trends. The currency rate is currently under the usual seasonal appreciation pressure, but not to the extent which would cause the central bank difficulties in maintaining its stability. Real interest rates have been decreased, which may be explained primarily with the elimination of bad banks from the market and a stronger competition among banks doing positive business. The IMF official and HNB representatives today also discussed prospects for the conclusion of a stand-by arrangement with the IMF. (hina) ha jn