At its session today, the Council of the Croatian National Bank discussed the latest economic developments and forecasts, as well as the financial stability analysis, and adopted the monetary policy projection for the forthcoming period.
As shown by available indicators and estimates of future trends, GDP is expected to decrease by about 0.2% in 2014 before growing by 0.4% in 2015. These estimates are based on the assumption of a continued decline in personal consumption and a negative effect of the reduction of deficit in government spending on economic activity, with a positive impact on the economic recovery coming from the growth of foreign trade and the gradual launching of investments in the following year.
The annual rate of change in prices will hold steady this year (a growth of approximately 0.1%) due to declining world raw materials prices, improved domestic weather conditions, the removal of the remaining tariffs upon Croatia's accession to the EU and weak domestic demand. Consumer prices are projected to grow by about 1.6% in the following year.
The exchange rate stability will continue to be the backbone of monetary policy, which is to remain highly expansionary, aimed at maintaining high liquidity levels in the system. The programme encouraging banks to finance private enterprises using proceeds from the redemption of CNB bills prior to their maturity will remain in effect. Corporate demand for loans is expected to increase gradually in this and the following year (placements are projected to grow at an approximate rate 2% and 2.7% in 2014 and 2015 respectively). The household deleveraging process will continue, although at a decelerated pace (-0.9% and -0.6% in 2014 and 2015 respectively), whereas demand for loans and spending propensity can only be boosted by a significant economic growth and improved labour market conditions, leading to an increase in consumer optimism.
Also at today's session, the CNB Council approved the appointment of Zdenko Matak and Martin Horning as Members of the Management Board of Erste&Steiermärkische Bank d.d., Rijeka and Vlasta Žubrinić-Pick as Chairwoman of Raiffeisen stambena štedionica d.d., Zagreb, the extension of the mandate of Zvonimir Akrap as Member of the Management Board of Société Générale - Splitska banka d.d., Split and the appointment of Monika Céreová as Member of the Management Board of Vaba banka d.d., Varaždin.
Raiffeisenbank Austria d.d., Zagreb was given approval for the acquisition of a 100% stake in the equity capital of Raiffeisen stambena štedionica d.d., Zagreb.