WASHINGTON, March 20 (Hina) - Croatia's authorities deserve to be praised for their three-year economic programme, the International Monetary Fund (IMF) First Deputy Managing Director, Stanley Fischer, said on Monday in Washington
after the IMF approved a 14-month stand-by credit for SDR 200 million (about US$255 million) for Zagreb.
WASHINGTON, March 20 (Hina) - Croatia's authorities deserve to be
praised for their three-year economic programme, the International
Monetary Fund (IMF) First Deputy Managing Director, Stanley
Fischer, said on Monday in Washington after the IMF approved a 14-
month stand-by credit for SDR 200 million (about US$255 million)
for Zagreb.#L#
The arrangement enables Croatia to draw SDR 40 million (about US$51
million) from the IMF immediately.
"However in view of the comfortable reserve level, good access to
capital markets, and the positive external outlook, the
authorities do not intend to make purchases and will treat the
arrangement as precautionary," read a statement issued by the IMF
on Monday evening.
"The Croatian authorities are commended for adopting a three-year
economic program for 2001-03 that seeks to achieve sustainable high
rates of economic growth with price stability and external
viability through fiscal adjustment, wage discipline and
structural reforms in the context of continued exchange rate
stability," said Stanley Fischer, who chaired the session at which
the IMF Executive Board okayed the stand-by arrangement.
"The program is ambitious, as is necessary for Croatia's economic
stability and development (...) and its successful implementation
will require firmness on the part of the authorities and support by
parliament and the public at large," Fischer maintained.
He called on the Ivica Racan Cabinet to define actual wage scales
for civil servants and other government workers and "to adopt and
start implementing specific employment reduction plans" for
employees in the public sector.
"The finances of the pension and health funds should be firmly
controlled while more fundamental reforms are being prepared with
the assistance of the World Bank," he added.
"If slippages in the fiscal area were to materialise despite these
efforts, the authorities should not hesitate to activate the
contingency measures identified in their program," he assessed.
Fischer viewed the Croatian National Bank's (HNB) monetary
programme as appropriate for this period ensuring a stable exchange
rate, but the central bank "should not resist any unexpected large
or persistent exchange market pressures."
"The 2001 budget's heavy reliance on privatisation receipts makes
it essential for the authorities to press ahead with their
privatisation plans." Prompt and decisive action in this area is
necessary, he added.
(hina) ms