EBRD ISSUES REPORT ON CROATIAN ECONOMY ( Editorial: --> 8032 )

( Editorial: --> 8032 ) ZAGREB, Nov 4 (Hina) - Progress in the rehabilitation of Croatian banks, the privatisation of big banks, the beginning of voucher privatisation, slow course of the restructuring of the industry sector and services, a 10% increase in profit tax in relation to last year and the postponement in the introduction of Value Added Tax till January 1998 are the basic characteristics of Croatian economy at this moment, said the Transition Report 1997 drafted by the Croatian Reconstruction and Development Bank (EBRD). The report stressed that the private sector registered a continuous growth, proportional to the privatisation process. The private sector reached 55% of the Gross Domestic Product (GDP), but the growth of the gray economy, with a 25% participation in GDP, was concerning. One of the main tasks of the Croatian government in the forthcoming period would be the reconstruction of the ship-building industry, metallurgy, textile and plastics industry and wood and timber industry, the EBRD said in the report. One of the burning issues is the rehabilitation of the pension plan, because there are about 900,000 pensioners to every one and a half million employed persons, and their number will continue to grow. The interest of foreign investors had increased significantly since Croatia received a BBB credit rating from three of the most important credit agencies early in the year, and since it issued its Euro bonds in US$ and DM denominations, the EBRD said. (hina) lm jn 041333 MET nov 97