CROATIAN FINANCE MINISTER EXPECTS PRICES TO DROP SLIGHTLY

( Editorial: --> 3331 ) ZAGREB, Jan 9 (Hina) - Croatian Finance Minister Borislav Skegro told a news conference about a Consumer Support Commission, the application of the Value Added Tax (VAT), and the realisation of the government budget for 1997. Explaining Thursday's Croatian government decision to establish a Consumer Support Commission, Skegro said that its task was to protect consumers from an excessive increase or insufficient decrease in prices of certain products and services, which were being justified by the introduction of the VAT. Similar commissions were also established by countries introducing VAT, and they had a common wish to maintain the population's purchasing power. The Commission is temporary and will cease to function probably by the end of the year. Skegro held that it was realistic to expect a slight decrease in prices when all producers and storekeepers adjust to the VAT of 22 per cent. The government is preparing measures about which the public would be informed next week, Skegro said, adding that the government would not freeze prices. A deficit of 1.1 billion kuna had been registered in the government budget for 1997, which was less than one per cent of the Gross Domestic Product (GDP). The planned deficit was 2.64 per cent of the GDP. The results were better because current budgetary revenues were 6 per cent higher than had been planned. Capital yields had been realised by only a third of what had been planned, which meant that the property and stock of public companies had not been put up for sale, he said. Despite this total revenue was 2.7 per cent higher than planned, Skegro said, adding that this made it possible for Croatia to incur debts of 4.4 billion kuna, and not the planned 6.7 billion kuna last year. In relation to 1996, last year's current revenue increased 10.4 per cent, while the yields from product and service sales tax increased 12 per cent, and yields from profit tax increased 40 per cent in relation to 1996. (hina) lm mm 091742 MET jan 98