CROATIA TO MANUFACTURE GOODS FOR GLOBAL MARKET - MATESA

ZAGREB, Sept 16 (Hina) - Low inflation, steady industrial production growth (above six percent annually), an increase in the gross national product (G.N.P.), a budget deficit below the three percent of the G.N.P., the fiscal policy with the aim of relieving the economy, the application of the value added tax (V.A.T.) and the stability of all segments important to the economy, will be basic characteristics of the country's economic policy in 1998, Croatian Premier Zlatko Matesa has said. On Tuesday Matesa said at an economic forum held each year as a part of the international autumn fair in Zagreb that no big deviations from current macroeconomic and fiscal policy should be expected. He added that a stable, moderate and real policy would be further pursued. The foundations for economic plans were to be the orientation of the production toward "the global rather than the domestic market", the premier told businessmen at the forum. According to Matesa, the government envisages the industrial production growth by six percent this year. That it is realistic is proved by the fact that the industrial production in August this year rose by 3.6 percent in comparison to August in 1996. The industrial production has been continuously growing for 23 months. Commenting on relations with foreign countries, he described talks with CEFTA member-countries as priorities by the end of 1997. He said he was expecting the signing of agreements on free trade with Poland and Slovenia and the beginning of talks on the matter with Ukraine and Romania. Asked by businessmen about the imposition of the value added tax, Matesa replied that the V.A.T. would be introduced with a uniform 22 percent rate. By collection of the V.A.T., the state would renounce its claim to at least two percent of the G.N.P., and let those means remain in the economy. By imposing the V.A.T., the country would directly help exporters, as the export would be untaxable, Matesa said and added that there would be no special lower rate for tourism. (hina) jn mš 161828 MET sep 97