Croatia: stabilisation brings mixed results

Croatia has introduced a stabilisation program to curb the country's inflation rate, estimated at 1,500%, but the measures have had little impact on restoring business confidence. Measures include a limit on wage increases to 5% monthly, a restriction on heating to 18 deg centigrade in Zagreb offices and apartments, and a devaluation of the Croatian dinar. Inflation fell to 5% in Nov 1993 compared with between 25% and 18% in earlier months in 1993, and the dinar is stronger compared with the Deutschemark. Business leaders criticise fluctuations in currency rates, and fear a parallel budget linked to Croatia's war expenditure, arguing that the drop in inflation may not be long lived.