CNB Council: Real GDP growth slows down in Q4 2019

Published: 12/2/2020

At its session today, the CNB Council examined current economic and monetary developments as well as the analysis of the banking system’s financial stability in Q4 2019, while also adopting several decisions on matters falling within its competence.

Available monthly indicators suggest a slowdown in real GDP growth in Q4 2019. Labour market developments remained positive: employment and wages grew and unemployment decreased. The annual consumer price inflation rate accelerated from 0.7% in November to 1.4% in December 2019, with the largest upward contribution made by food, due to a spike in pork prices, and refined petroleum products. The contribution of refined petroleum products to the acceleration of the annual inflation rate reflected a base effect caused by a decrease in these products’ prices in December 2018. Financing costs generally continued to decline on the back of accommodative monetary policy.

The annual growth of bank lending accelerated to 4.2% at end-2019, driven by increases in household and corporate lending. Household lending was primarily boosted by the continued annual growth of housing loans and, to a smaller extent, of cash general-purpose loans. The annual increase in lending to non-financial corporations was spurred by an uptick in new lending and, for the most part, by the disappearance of the bulk of the negative effect caused by the activation of government guarantees issued to shipyards in late 2018. According to fiscal data available for Q3 2019, positive trends in public finances continued, underpinned by the budget revenue growth that was faster than the strong expenditure growth.

The CNB Council also approved the proposal of Sberbank d.d., Zagreb to reappoint Csaba Soós, as Management Board Chairman and the proposal of Zagrebačka banka d.d. to appoint Dalibor Ćubela as Management Board Member.