Yugoslavia lifts price controls


BELGRADE, Yugoslavia -- Yugoslavia Saturday lifted price controls on nearly all products and services in a move aimed at introducing market economy rules and controlling inflation.

The action is considered a major step in a long-term stabilization program the government is pursuing to pull the country of 23 million people out of a serious economic slump.


Yugoslavia's unique workers self-management economic system has been plagued by a $20 billion debt to Western creditors and a 40 to 60 percent inflation rate.

Under a government decree that took effect Saturday, only 8 percent of products remain under the direct state price control system. They include wheat, corn and some unnamed 'strategic' industrial products.

The prices of 37 percent of goods will be established through 'self-managing agreements' between the producers and consumers while 55 percent of the prices will be established freely by the producers.

Among goods and services affected are meat and processed meat products, sugar, fat and edible oil, cigarettes, gasoline and heating oil, coal, fertilizers, cars, agricultural machines, household electric appliances, cement, footwear, textiles and public transportation fares, officials said.

In recent years, businesses needed to get formal approval from the government to increase the prices of their products.


'More freedom for producers means bigger responsibility for them,' said government spokesman Dimitrije Tasic.

He told reporters the federal government and governments of Yugoslavia's six constituent republics can still take measures against firms that raise prices too high.

Government officials said the authorities will order banks to cut credit to those firms which violate the agreedprice policy.

Austerity measures have cut down the standard of living over the past three years by about 30 percent. The government wants to curb inflation to 40 percent this year.

The federal government in cooperation with the International Monetary Fund and western commercial banks has rescheduled loans of $2 billion -- due this year -- for the next seven years on a 4-year grace period. In 1985, Yugoslavia will have to repay $5 billion to Western creditors.

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