## Press Release: IMF Approves Second STF Drawing for Croatia

_IMF News, April 11, 1995_

## Source details

**Canonical URL:** [Press Release: IMF Approves Second STF Drawing for Croatia](https://www.imf.org/en/news/articles/2015/09/14/01/49/pr9520)

## Other formats

- [Markdown version](/en/news/articles/2015/09/14/01/49/pr9520/index.md)
- [Structured JSON version](/en/news/articles/2015/09/14/01/49/pr9520/index.json)
- [Bundle manifest](/en/news/articles/2015/09/14/01/49/pr9520/bundle-manifest.json)

## Bibliographic details
- Published: April 11, 1995

---

### IMF approval and financing
- The IMF approved a second drawing for Croatia equivalent to SDR 65.4 million (about $ 103 million) under the systemic transformation facility (STF).
- The drawing is intended to support the Government's 1995 program of macroeconomic stabilization and structural reform.
- The first disbursement under the STF, also SDR 65.4 million, was approved on October 14, 1994, together with a stand-by arrangement for an additional SDR 65.4 million.

### Background and recent economic developments
- Following a cumulative decline of more than 30 percent in Croatia's real GDP during 1991-93, and the risk of hyperinflation, the authorities' IMF-supported stabilization program achieved considerable success in 1994.
- Economic activity began to recover in 1994, inflation was sharply reduced, and the emerging private sector grew significantly, although much of the economy remains dominated by large state-owned enterprises.
- Both the overall budget and the external current account registered surpluses in 1994.
- The situation remains fragile because of the slow implementation of planned structural reforms and uncertainties connected to the security situation in the region.

### The 1995 program
- The program for 1995 is based on a pickup in real GDP growth and an annual inflation target of 2.6 percent.
- The overall budget for 1995 is programmed to move to a deficit of 0.5 percent of GDP.
- Expenditures for the year will increase compared to the 1994 outturn as a result of higher wage and salary payments, lending for reconstruction projects, military spending, and slightly higher provisions for expenditures related to the social safety net.
- The increases in spending will be offset by higher revenues resulting from taxes on goods and services, and from asset sales.
- A tight monetary policy will be followed, based on using the exchange rate as the main source of financial discipline, combined with a cautious expansion of domestic credit.

### Structural reforms
- A crucial element of Croatia's program is the imposition of financial discipline on enterprises that are still state owned.
- In January 1995, a Ministry of Privatization was established, which is expected to give a new impetus to restructuring these enterprises.
- The authorities are also committed to a program of structural reform in the banking sector, where some progress has already been made.

### Quota and IMF credit position
- Croatia succeeded on December 14, 1992 to the membership of the former Socialist Federal Republic of Yugoslavia.
- Its quota1 is SDR 261.6 million (about $411 million), and its outstanding use of IMF credit currently totals SDR 85 million (about $133 million).

### Croatia: Selected Economic Indicators
- Real GDP growth (percent change): 1993: –3.2; 1994*: 1.8; 1995**: 4.5
- Consumer prices (Dec./Dec. annual increase): 1993: 1,149.2; 1994*: –3.0; 1995**: 2.6
- External current account (percent of GDP): 1993: 2.5; 1994*: 1.5; 1995**: 0.1
- Central budget overall balance (percent of GDP): 1993: --; 1994*: 0.6; 1995**: –0.5
- Sources: Croatian authorities; and IMF staff estimates.
- Notes: *Estimated. **Program.

*International Monetary Fund — Press Release No. 95/20, April 11, 1995.*

---


## References

- [Republic of Croatia and the IMF](http://www.imf.org/external/country/HRV/index.htm)
- [Republic of Serbia and the IMF](http://www.imf.org/external/country/SRB/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr9520_