Croatia's Inflation Rate To Rise In 2007, CB Governor Says

13 11 2007 Zagreb _ Croatia's inflation rate will likely rise in 2008 to 4.5 percent, from 2.8 percent in 2007, the country's Central Bank governor said on Tuesday.

Governor Zeljko Rohatinski was quoted by state-run HRT TV as saying that the country's gross domestic product will grow by 5.9 percent in 2007.

Rohatinski was reported as saying that GDP growth will likely slow down to some 5 percent in 2008.

Croatia, formerly part of the now defunct communist Yugoslavia and now a candidate for European Union membership, has enjoyed steady 5-percent growth since 2001, mainly driven by state investment, personal spending and tourism.

The International Monetary Fund has warned that the country's growth is unsustainable over the longer run and has called on the authorities in Zagreb to reduce Croatia's external vulnerability.

According to the report Rohatinski said the Central Bank will "continue to keep the lid on credit expansion." He also announced that the Bank will "continue with its restrictive monetary policy" in 2008.


Rohatinski said foreign debt is expected to stabilize at around 85.5 percent of GDP in 2007 and to drop to 85 percent in 2008. (BIRN)