ZAGREB, Dec 4 (Hina) - The International Monetary Fund (IMF) and +World Bank asked Croatia on Friday to maintain the economic +stability is has achieved as a predisposition for further +development.+ "This stability is a very
conductive platform from which Croatia +can now launch a new stage of economic development and +reconstruction. In this new stage, it is imperative to maintain +macroeconomic stability and growth by extending discipline from +the macro aggregates to the micro-foundations of the economy," +World Bank's Zagreb Office chief Sandor Sipos said at the +Conference on the Reconstruction and Development of Croatia in +Zagreb on Friday.+ Financial discipline will break the vicious circle of non-payment +and inter-enterprise arrears which are running as high as 10-20 per +cent of GDP according to some estimates, Sipos said.+ During the next three to four years, the World
ZAGREB, Dec 4 (Hina) - The International Monetary Fund (IMF) and
World Bank asked Croatia on Friday to maintain the economic
stability is has achieved as a predisposition for further
development.
"This stability is a very conductive platform from which Croatia
can now launch a new stage of economic development and
reconstruction. In this new stage, it is imperative to maintain
macroeconomic stability and growth by extending discipline from
the macro aggregates to the micro-foundations of the economy,"
World Bank's Zagreb Office chief Sandor Sipos said at the
Conference on the Reconstruction and Development of Croatia in
Zagreb on Friday.
Financial discipline will break the vicious circle of non-payment
and inter-enterprise arrears which are running as high as 10-20 per
cent of GDP according to some estimates, Sipos said.
During the next three to four years, the World Bank would like to
support Croatia's efforts particularly in preserving
macroeconomic stability, redirecting the role of the state and
expanding the role of the private sector in the economy, promoting
the effective operation of markets, and refocusing infrastructure
development, Sipos stressed.
"These objectives are consistent with the intent to broaden the
base and sustainability of economic growth and establish a more
dynamic and export-oriented private sector that would be the source
of future increase in employment and incomes".
IMF representative warned that the current account deficit,
despite the plans of the Croatian Government to decrease it by 7-8
per cent, is still too large.
He warned that the access to foreign debts for Croatia would be
limited and expensive due to the global financial turmoil.
"Given the need to reduce the current account deficit, the
Government should plan to have as near balance as possible in its
accounts in 1999," IMF representative Gary O'Callaghan said.
The budget for 1999, as currently envisaged, takes a confident view
on the prospects for revenues from taxation and privatisation, a
view which might be tempered with some caution when planning the
profile for expenditure until later in the year, he said.
Funds for reconstruction is to undertake expenditure reallocation
within the confines of existing revenue constraint, O'Callaghan
said.
The World Bank urged the Government to make the best use of scarce
resources by refraining from unproductive expenditures, including
excessive military spending and reducing wastage in social funds.
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