At today's session, the CNB Council examined recent economic and monetary developments, adopted the report on international reserves management in 2015 and issued several decisions on matters falling within its competence.
In the last three months of the previous year, current economic activity slowed down slightly, which is associated, among others, with a higher GDP level in the third quarter and extremely good tourist results during that quarter. At the entire 2015 level, economic developments were generally favourable, and real GDP grew by 1.6%. Further fast growth in the rates of exports of goods and services was accompanied by recovery in domestic demand, followed by a small increase in employment and wages. The current account surplus also continued to increase. In the area of public finances, the fiscal deficit declined considerably, owing to the favourable dynamics in revenues and a stagnation in expenditures. The annual rate of consumer price inflation in 2015 was negative and continued to be negative in January 2016, mostly as a result of the fall in the prices of crude oil. CNB's monetary policy, in addition to maintaining the stability of the exchange rate of the kuna against the euro, maintained its expansionary character, further boosted in early 2016 by the introduction of long-term structural reverse repo operations, which should add to a further downward trend in interest rates and contribute to lending recovery.
At the end of December 2015, international reserves reached EUR 13.7bn, an increase of a little over one billion euro or eight percent from the end of the previous year. Net international reserves (excluding foreign exchange reserve requirements, special drawing rights with the IMF, foreign exchange funds of the Ministry of Finance and investments in repo transactions) rose by EUR 473.5m or 4.4% in 2015, standing at a little over EUR 11.2bn at the end of that year. It was stressed during the discussion that the CNB had balanced its international reserves management policy in an effort to cope with the extremely unfavourable circumstances in the financial markets marked by, primarily, thus far the lowest and even negative interest rate levels and managed to produce a favourable financial result.
The CNB Council agreed with the decision of the Supervisory Board of Banka Kovanica d.d. to reappoint Nicola Ceccaroli as the Chairperson of the Management Board of that bank for another term in office and with the decision of the Supervisory Board of Hypo Alpe-Adria-Bank d.d. Zagreb for the appointment of Jasna Širola and Dubravko-Ante Mlikotić as Members of the Management Board of that bank. In Karlovačka banka d.d. Karlovac, Marino Rade will continue to be a Management Board Member.