At its session on Wednesday, chaired by the CNB Governor Boris Vujčić, the CNB Council reviewed the latest economic and monetary developments and a report on the banking system condition in the first quarter of this year, adopted the monetary policy projection for the period from 2018 to 2021 and issued several decisions on matters falling within its responsibility.
Following a stagnation in GDP late in the previous year, economic activity rose slightly in the first three months of 2018, driven by domestic demand, with personal consumption being the main contributor. Foreign demand and investments are also expected to strengthen towards the end of the year. The annual real GDP growth rate is anticipated to stand at 2.8% in 2018 and remain at the same level in 2019. Employment is expected to continue to grow and unemployment to decline. Inflation is likely to accelerate to 1.7% in 2018, primarily due to an increased contribution of energy prices resulting from a build-up of imported inflation pressures. Despite the expected mild acceleration of domestic inflationary pressures, the inflation rate could drop slightly in 2019 because of an anticipated fall in energy prices. The current and capital account surplus could narrow gradually in 2018 and 2019, mainly due to the deepening of the trade in goods deficit, while relative external debt indicators are expected to improve further. The adopted monetary projection is based on the assumption that the CNB's monetary stance will remain expansionary so as to enable it to continue supporting the economic recovery, while maintaining a stable exchange rate of the kuna against the euro under such macroeconomic conditions.
A recent analysis of the Croatian financial system stability and potential risks has shown that its systemic risk exposure has remained moderate and even slightly improved due to the trends in the non-financial sector indicating a decline in the vulnerability of households and enterprises.
As part of the preparations for the completion of the resolution process for Jadranska banka d.d., Šibenik through its sale to Hrvatska poštanska banka d.d., Zagreb, the Council issued approval to Hrvatska poštanska banka to acquire a qualifying holding equalling and exceeding 50 percent of the capital of Jadranska banka. The Council also accepted the proposal of the State Agency for Deposit Insurance and Bank Resolution, acting as the Supervisory Board of Jadranska banka, to appoint Mato Filipović as Chairman and Alan Herjavec as Member of the Management Board of the Bank. Their mandates will commence once the resolution procedure is completed and the mandate of the resolution board expires.
The Council also approved the appointment of Marijan Kantolić and Verica Ljubičić as Members of the Management Board of Samoborska banka d.d., Samobor, and the appointment of Marco Lotteri as Member of the Management Board of Zagrebačka banka d.d., Zagreb. Privredna banka Zagreb d.d. was granted approval to acquire a qualifying holding equalling 100 percent of the capital of Veneto banka d.d., Zagreb.