NEW METHODOLOGY SHOWS MORE FAVOURABLE BALANCE OF PAYMENTS

( Editorial: --> 9927 ) ZAGREB, Feb 6 (Hina) - The first results of the balance of payments statistics review show a significant deficit decrease in the balance on current account, Croatian National Bank deputy governor Zdravko Rogic told reporters in Zagreb Friday. The balance on current account deficit was US$430 million lower in 1995, US$570 million lower in 1996, and US$326 million lower in the first nine months of 1997. According to the old methodology, the balance on current account deficit in the first nine months of 1997 amounted to US$1.43 billion, whereas a new methodology shows it is US$1.087 billion. Rogic said the results of the review, verified by International Monetary Fund experts, showed changes on all important balance of payments items, including the account on commodities, services and transfer. Of particular importance is the significantly reduced net errors and omissions item, said Rogic, explaining according to the old methodology, that item amounted to US$1.3 billion, while the new methodology showed US$508 million. An IMF representative in Croatia, Gary Callahan, was satisfied with the job done and the much more accurate picture of Croatia's balance of payments position. In its report delivered to reporters, the IMF mission, which visited Croatia in January, assessed that its opinions were in agreement with those of the Croatian National Bank (HNB). Callahan announced the IMF would assist in the second stage of the statistics review as well. In answer to journalists' inquiries, HNB governor Marko Skreb said the central bank would consider a possible reduction of the banks' obligation to redeposit new foreign exchange savings abroad. "There will be no sudden decisions and changes. We want to consider all consequences of such a decision," said Skreb. Confirming the assessment that positive interest rates of commercial banks are, at 14 per cent, relatively high, Skreb recalled that interest rates had been falling in the past two years, and are expected to continue falling. Skreb said there were no reasons for the devaluation of the kuna. Banks were free in forming rates. Not even value added tax accounted for a rate change, the governor said. "Due to the hysteria surrounding VAT a huge amount of imports were registered in December of last year," said Skreb, adding December 1997 was, by import worth, "the absolute record month in Croatia's recent past". (hina) ha mm 061459 MET feb 98