CNB Council: Inflation in September at 1.4%

Published: 14/11/2018

At its meeting today, the Croatian National Bank Council examined recent economic and monetary indicators, adopted the Semi-annual Information on the Financial Condition, the Degree of Price Stability Achieved and the Implementation of Monetary Policy in the first half of 2018 and made several decisions on matters within its area of responsibility.

Real GDP growth slowed down in the third quarter of 2018 as shown by the data on industrial production and real retail trade turnover. Favourable developments in the labour market continued at a somewhat slower pace than in the earlier part of the year. Consumer price inflation dropped from 2.1% in August to 1.4% in September, primarily under the influence of a slowdown in the annual rate of growth in energy prices. Core inflation slowed down as well. The CNB continued to pursue an expansionary monetary policy, maintaining very high levels of liquidity in the domestic financial market. The annual growth in corporate placements picked up, while the annual growth in household placements slowed down only slightly. Net external debt decreased considerably in July and August thanks to the seasonal inflow of foreign exchange from tourism and central government deleveraging. After recording a significant general government budget surplus in the second quarter, Ministry of Finance cash-basis data point to continued favourable developments in the third quarter as well.

At the meeting, the CNB Council adopted several decisions harmonising the legal framework for the operation of the national component of the TARGET2 system with the applicable guidelines of the European Central Bank related to the execution and settlement of instant payments. Furthermore, OTP banka Hrvatska d.d. Split was granted approval to provide the financial service of portfolio management and advice.

The CNB Council also granted approval to the proposal of the Supervisory Board of Raiffeisenbank Austria d.d. Zagreb to appoint Višnja Božinović, Liana Keserić and Ivan Žižić as members of the bank's Management Board.