At its meeting held on Wednesday, July 10, 2002, the Council of the Croatian National Bank, chaired by the Governor, Dr Željko Rohatinski, reviewed recent monetary and economic developments, monetary policy projections for the third quarter of 2002, and reached several decisions within its authority.
Available indicators show an upward trend in economic activity. In the first quarter of 2002, gross domestic product grew by 4.6 percent, mostly owing to the increase in investment and personal consumption. The highest annual growth was recorded in construction (15.2 percent) and trade (12 percent). Industrial production was 3 percent higher in the first five months of 2002 than in the same period last year. Taking into account the considerable increase in imports of equipment, dynamic economic activity is expected to continue in the forthcoming period.
Inflation remains low: the annual growth rate of retail prices was 2.2 percent in June (4.9 percent in June 2001), and core inflation was 1.0 percent (4.4 percent in June 2001).
Appreciation pressures, which were observed in the preceding months and caused by increased foreign exchange inflows, continued in June. In its foreign exchange market interventions, the Croatian National Bank purchased from banks a total of EUR 342.2 million in the last three months (EUR 173.1 million in June), thus managing to weaken appreciation pressures. Compared with the preceding years, this was the strongest central bank activity in the foreign exchange market during the second quarter. In contrast to the June developments, the exchange rate of the kuna against the euro slightly depreciated in the first days of July. In its efforts to maintain exchange rate stability, the CNB will continue applying appropriate measures to prevent stronger exchange rate fluctuations towards both appreciation and depreciation.
The liquidity of the banking system remained very high.
At the meeting held on Wednesday, the CNB Council agreed with the proposals of several banks' supervisory boards regarding the nominations for president and members of the banks' management boards. The CNB Council agreed with the nominations of Mr. Dražen Božić for member of the management board of Dubrovačka banka d.d. Dubrovnik, Mr. Tomislav Vuić for president of the management board of Erste & Steiermärkische Bank d.d. Zagreb, Mr. Petar Radaković for president and Mr. Sava Dalbokov and Ms. Slađana Jagar for members of the management board of Riječka banka d.d. Rijeka, Mr. Tadija Vrdoljak for member of the management board of Slavonska banka d.d. Osijek, Mr. Ivan Malada for president and Mr. Joško Vukušić for member of the management board of Splitsko-dalmatinska banka d.d. Split. Cassa di Risparmio di Trieste - Banca S.p.A. Trieste was given approval to acquire 8.144 percent of voting shares in Cassa di Risparmio di Trieste - Banca d.d. Zagreb, which will increase the Italian bank's stake in its Croatian daughter bank to 80.201 percent.