CRO UPPER HOUSE ENDORSES 1998 DRAFT BUDGET

( Editorial: --> 3627 ) ZAGREB, Nov 25 (Hina) - The Croatian parliament's House of Counties on Tuesday endorsed Croatia's draft budget for 1998. The draft budget was explained by Deputy Finance Minister Mijo Jukic, who said it paid attention to the social component and a better and cheaper operation of the state. Government revenues for next year are expected to total 36.8 billion kunas, while expenditures about 38.8 billion kunas (USD 6.46 billion). The two billion kuna budget deficit, or 1.6 per cent of the estimated 1998 gross national product, would be covered by incurring debts at home and on the international market, said Jukic. The real budget increase for 1998 in relation to this year amounts to 8.5 percent. According to Jukic, the draft budget was based on an expected 7.5 per cent economic growth, a 3 to 3.5 per cent inflation rate, a stable currency and a further drop in interest rates. Total tax receipts are expected at 32.6 billion kunas (USD 5.43 billion) and their share in the gross national product would drop to 1.3 per cent, Jukic said, adding this would be a significant relief for the economy. The most important tax receipt was value added tax, estimated to raise 15 billion kunas, he said. The deputy finance minister said 2.2 billion kunas was planned for reconstruction and 7.65 billion kunas, or four per cent more than this year, would go to the defence ministry. A significant increase in funds was envisaged for the transport ministry, 3.95 billion kunas or 16.05 per cent more than this year, and the education and sports ministry, 3.5 billion kunas or 9.6 per cent more. Funds for the Homeland War defenders ministry will amount to 2.18 billion kunas, which is 26.5 per cent more than this year. During discussion, MPs in particular demanded more funds for infrastructure, development of the economy in areas of special government care, housing loans to young families, the financing of counties, and for health, education and science. Jukic said the demands forwarded to the government amounted to more than 70 billion kunas (USD 11.6 billion). They had to be reduced to realistic frameworks, he said. The draft budget was endorsed by representatives of the Croatian Democratic Union, while the opposition outlined many objections and assessed the draft budget as centralist and non-democratic. The Upper House also endorsed a final bill on the execution of the Croatian budget for 1998. (hina) ha jn 251908 MET nov 97