CROATIA DECIDES NOT TO USE SUBSEQUENTLY APPROVED IMF LOAN TRANCHES

ZAGREB, Oct 13 (Hina) - Croatia's government and central bank decided on Monday not to use the subsequently approved second and third tranches of a three-year loan from the International Monetary Fund, the government communications office said in a statement. "Although Croatia met all the criteria from the IMF arrangement, there are no clear economic reasons for drawing about $80 million after delays. "The balance-of-payments position of Croatia and a high level of foreign exchange reserves already now guarantee a sufficient degree of liquidity of the country in international payment operations," the statement said. Last Friday the IMF approved continuation of the payment of the $486 million loan it had granted in March for a government medium-term programme of economic reform. The arrangement was blocked this summer at the request of the United States because of its dissatisfaction with Croatia's failure to meet its commitments under the Dayton peace agreement regarding the reintegration of the UN-administered Croatian Danube region. The statement, issued after the government's session, said that the government and the central bank would continue implementing their three-year economic programme which was supported by the IMF. "Very low inflation, a stable foreign exchange rate, a national budget deficit of less than three per cent of Gross Domestic Product, an increase in exported commodities and services, GDP growth of more than six per cent a year, privatisation, and the increased efficiency and competitiveness of the Croatian economy have been and remain basic characteristics of that programme. "For the fifth consecutive year Croatia has been independently pursuing a macroeconomic policy of stability and sustainable growth. During that period it has shown that political and economic stability go together. "The Government and the National Bank of Croatia are very satisfied with the cooperation they have so far had with the IMF. Their intention is to continue that cooperation on new foundations as befits countries of proven orientation and experience in the policy of macroeconomic stability," the statement said. The session, involving National Bank Governor Marko Skreb, was chaired by Prime Minister Zlatko Matesa. (hina) vm jn 131818 MET oct 97