ZAGREB, February 15, 2018 – The last quarter of 2017 saw continued growth of economic activity in Croatia, albeit at a slower rate than earlier in the year, the Croatian National Bank (HNB) said in a statement on Wednesday after a meeting of its Council.
The HNB Council discussed recent monetary and economic trends and financial stability and heard reports on the situation in the banking system and indicators of its operation for the first nine months of 2017.
Economic activity continued to grow in the last quarter of 2017, but at a slower rate than earlier in the year. At the same time, the labour market recorded a further drop in unemployment and a prominent quarterly increase of the employment rate.
In December 2017, compared with November 2017, consumer prices fell by 0.3%, mostly because of seasonal decreases in clothing and footwear prices, while annual inflation was 1.2%.
The HNB recalled that in December 2017 and January 2018 it had purchased foreign currency from commercial banks to ease pressure on the appreciation of the kuna, further increasing the already high kuna liquidity of domestic banks.
In such circumstances interest rates on bank loans have continued to decrease gradually. In December, corporate and household lending slightly accelerated their annual growth, while central government borrowing from credit institutions considerably decreased after the repayment of road companies’ loans. The net foreign debt of domestic sectors increased in October and November 2017 following a sharp decline during the summer months.
Available fiscal data for the second half of 2017 indicate that favourable trends in public finance continued, the general government balance improved and the general government debt to GDP ratio was reduced, the statement said.
