“The situation is complex and it is really difficult to predict any trends,” Marić said after a cabinet meeting, commenting on the latest data from the Croatian Bureau of Statistics (DZS) on the increased inflation rate in May of 10.8% on the year, which is the highest inflation rate since the DZS has been collecting data.
Marić noted that the European Central Bank reacted a few days ago by announcing an increase in reference interest rates by 0.25 percentage points in July, and although growth will almost certainly occur in September, it is unknown how much, and it depends on further developments with inflation.
He explained that such measures by central banks are one of the main tools to mitigate the effects of inflation. However, he called for caution saying that in the current circumstances it is very important to preserve the economy’s normal functioning, in terms of supply chains, as well as maintaining the employment level and GDP.
Given the further rises in energy and food prices, reporters asked Marić if there would be any new measures to help citizens and the economy, to which he replied that certain decisions would be made depending on “developments and possibilities.”
There are a lot of initiatives and the government is taking everything into account, but it has to look at the broader picture all the time, Marić added.
Asked whether, due to the situation with interest rates, that could result in a significant increase in loan repayments for citizens, which, according to media reports, banks have already informed some clients about, Marić said that he personally did not receive any such notice and that was a question for the banks and the Croatian National Bank.
From talks held with the European Central Bank and the domestic financial industry, Marić concluded that, regardless of the trends leading to increased interest rates, this dynamic is “not that significant.”
He explained that all those who have fixed interest rates on existing loans are de facto protected. He also said that the situation with rising interest rates should not be linked to past loans pegged to the Swiss franc.
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