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Yugoslavia increases food, fuel prices

By
NESHO DJURIC

BELGRADE, Yugoslavia -- The Yugoslav government increased food and fuel prices by up to 69 percent Sunday and immediately imposed a freeze on wages and prices of other goods in a desperate effort to curb the nation's soaring inflation rate.

The government said effective Sunday prices would increase between 33 and 69 percent for such items as flour, bread, cooking oil, milk, sugar, gasoline, electricity, coal and railroad fares. The government estimated the price hikes would raise the cost of living by 18 percent.

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The measures to reduce inflation in the non-aligned communist Yugoslavia were approved Saturday by a majority vote of the federal parliament. Yugoslavia's inflation rate is running at 168 percent, the highest in peace-time Europe.

The two-chamber parliament approved the measures following three days of debate.

The parliament adopted the price hikes and wage freeze despite criticism of delegates from Slovenia and Croatia, the two most industrialized of Yugoslavia's six republics. Slovenia and Croatia delegates complained the measures contained too much state intervention and ignored the rules of a free-market economy.

Only one delegate from Slovenia -- Marjan Rozic, chairman of the federal parliament -- voted for the program Saturday.

Deputy Prime Minister Milos Milosavljevic told the parliament the anti-inflation measres were an attempt to 'remove disharmony among prices.'

Milosavljevic said the government was forced to take the steps because the annual inflation rate had reached 168 percent and could climb as high as 220 percent by January.

To avoid causing an inflationary spiral, the government also imposed a seven-month price freeze and salary control Sunday to prevent the food and fuel increases from driving up other prices.

The government of Prime Minister Branko Mikulic, who took office in May 1986, will hold talks in early December with Western creditors in an effort to restructure Yugoslavia's $19 billion debt. The nation will ask its annual debt repayment to be reduced from $5 billion to $2 billion.

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