The CNB Council today examined the latest economic and monetary developments as well as a report on international reserve management and a report on the central bank's financial operation in the first half of 2017, while also adopting several decisions on matters falling within its competence.
Both the quarterly and annual real GDP growth rates accelerated in the second quarter of 2017, and data available for July suggest that growth will continue to pick up in the third quarter. Employment continued to grow and unemployment decreased further in the second quarter. Consumer prices decreased seasonally by 0.7% in July from June, down at the same rate as in July last year. The annual overall inflation rate accelerated slightly from 0.7% in June to 0.8% in July, predominantly because of an increase in the annual growth of food product prices.
The CNB continued to pursue an expansionary monetary policy, alleviating appreciation pressures by foreign exchange interventions. Corporate and household lending continued to grow, with household lending in kuna rising further. Net external debt of domestic sectors decreased considerably in the second quarter, offsetting both gross and net external debt growth in the first three months of the current year. The general government deficit recorded a sharp annual decrease in the first quarter of 2017, and cash data released by the Ministry of Finance suggest that the favourable trend will continue in the second quarter of the year.
The CNB Council approved the reappointment of Balász Pál Békeffy as Chairman of the Management Board of OTP banka Hrvatska d.d. Zadar, the appointment of Alessio Cioni as Member of the Management Board of Privredna banka Zagreb d.d., Zagreb and the reappointment of Ivan Ostojić as Member of the Management Board of Wüstenrot stambena štedionica d.d., Zagreb, thus endorsing the decisions of these banks' supervisory boards.
Intesa Sanpaolo S.p.A. was granted approval for the acquisition of shares representing 100 percent of the equity in Veneto banka d.d. Zagreb. The Intesa Sanpaolo banking group agreed the acquisition of shares in Veneto banka within the restructuring of the Veneto Bank Group in Italy and required approval for this transaction from the CNB, the competent regulatory authority.
The Council also adopted a decision to put into circulation a 50 kuna banknote, bearing the issue date of 9 July 2012, as of 25 September 2017.