CNB Council: Inflation remains low

Published: 30/1/2019

At its meeting today, the Council of the Croatian National Bank reviewed recent monetary and economic developments, as well as the latest financial stability analysis. The CNB Council was informed about the banking system condition as shown by indicators of its operation in the nine months of the previous year. The CNB Council also adopted several decisions within its competence.

The available monthly indicators for the fourth quarter of 2018 point to a further slowdown in economic activity growth on a quarterly level, with the expectations for real GDP growth in 2018 as a whole standing at 2.7%. Consumer price inflation fell from 1.3% in November to 0.8% in December, mostly as a result of a considerable fall in the annual rate of change in the price of refined petroleum products. The CNB continued to pursue an expansionary monetary policy and, amid pronounced appreciation pressures on the exchange rate of the kuna against the euro, continued to purchase foreign exchange from the banks. This resulted at the end of December in the highest ever level of banks’ free reserves. Total placements of monetary institutions to domestic sectors (excluding the government) fell in December, reflecting a fall in loans to shipyards due to the payment of government guarantees. At the same time, household lending held steady at the previous month’s level. In October and November 2018, the central government balance continued to improve on an annual level, a development which will probably be cancelled out by the end of the year by outlays for activated government guarantees.

At its meeting today, the CNB Council approved the proposal of the Supervisory Board of Zagrebačka banka d.d. Zagreb to extend the term of office for Miljenko Živaljić as Chairman of the Bank’s Management Board and to reappoint Claudio Cesario, Lorenzo Ramajola and Marco Lotteri as Members of the Management Board. The CNB Council also approved the appointment of Nikolaus Maximilian Linarić and Eugen Paić-Karega as Members of the Bank’s Management Board.

The CNB also adopted the Decision on releasing into circulation kuna and lipa coins with mint year “2019”.