At its session today, the CNB Council discussed current economic and financial developments and enacted several decisions on matters falling within its competence.

The latest economic indicators signal a small decline in the level of economic activity in the third quarter relative to the second quarter, which could result in a considerable slowdown in the annual growth during that period. Industrial production, real retail trade turnover and construction fell on a quarterly level and the consumer confidence index remains steadily below the long-term average. The quarterly growth in nominal gross wages slowed down in the July to September period and real net wages continued to decline. Employment continued to rise, although unaccompanied by any significant fall in the unemployment rate. Inflation in September was 12.8%, with accelerated growth in all major components of the consumer price index, except food, the annual price growth of which slowed down slightly, influenced also by price caps on a number of essential food products. The tightening of financing conditions on an global financial markets started to spill over slowly to growth in bank interest rates on loans to households and corporates in Croatia, although they remain at relatively low levels. The growth in total placements of monetary institutions to domestic sectors (except the central government) continued to accelerate on an annual level as a result of growth in placements to non-financial corporations, particularly in the energy sector. At the same time, household placements growth slowed down slightly on an annual level.