The Mission of the International Monetary Fund led by Dimitri Demekas has arrived in Zagreb to conduct its first review of Croatia's implementation of the Stand-By Arrangement with the IMF approved in early August this year. As it was stressed at the introductory meeting held today at the CNB, the government budget for the next year, i.e. the measures and risks associated with the fulfilment of goals set in the arrangement will be the focal point of the discussions.

Governor Rohatinski and his associates informed the Mission about the recent macroeconomic indicators. The data for 2004 as a whole are expected to confirm low inflation, stable exchange rate, higher-than-projected international reserves, external debt of about 78% of GDP and current account deficit of about 5% of GDP. The Mission was also informed about the core objectives of monetary policy in 2005. However, it was stressed that the manner and dynamics of their implementation are closely related to the financing account of the budget deficit in 2005 that has not yet been placed at the central bank's disposal.

During its ten-day stay in Croatia, the IMF Mission will have several more meetings in the Government of the Republic of Croatia, the Ministry of Finance and the Croatian National Bank, and will also meet with the representatives of the Croatian Parliament, the Ministry of the Sea, Tourism, Transport and Development, the Ministry of the Economy, Labour and Entrepreneurship, the Croatian Privatization Fund and the Croatian Institute for Health Insurance. According to the visit schedule, the IMF Mission will also meet with the representatives of the Croatian Railways, the Croatian Roads, the Croatian Employer's Association and several large Croatian banks.