CNB Council session: GDP growth might accelerate in Q3

Published: 5/9/2019

The CNB Council today discussed the information on the latest economic and monetary developments and the general reserve management in the first half of the year and adopted several decisions on matters falling within its competence.

Economic activity continued to grow in the second quarter of 2019, albeit at a considerably lower rate than at the beginning of the year. Real GDP increased by 0.2% from the first quarter, while its real annual growth rate stood at 2.4%. The available high-frequency indicators suggest that real GDP growth might accelerate in the third quarter. Employment continued to grow in the second quarter, while unemployment remained unchanged from the beginning of the year. Wages also continued to grow. Consumer prices accelerated their annual growth from 0.6% in June to 1.1% in July, primarily due to an increase in the annual rate of change in the prices of unprocessed food products and clothing. The CNB continued to pursue an expansionary monetary policy, alleviating appreciation pressures on the kuna by purchasing foreign currency from banks in August, thus additionally boosting the already high liquidity of domestic credit institutions. Under such conditions, financing costs continued to decrease. The annual growth of bank lending decelerated at the end of July due to a drop in corporate loans resulting from the implementation of the settlement between the Agrokor Group and its creditors. Household lending picked up, primarily as a result of the stronger growth of housing loans, but also due to a slight acceleration in general-purpose cash loans. The general government deficit under ESA 2010 remained unchanged in the first quarter of 2019 from the same period in the previous year, with MoF data pointing to a balanced annual growth of revenues and expenditures in the second quarter.

The Council granted prior approval to Raiffeisen-Holding Niederösterreich Wien reg. Gen. m.b.H. for the acquisition of an indirect qualifying holding exceeding 20% of the initial capital of Raiffeisenbank Austria d.d. Zagreb and Raiffeisen stambena štedionica d.d. Zagreb. This acquisition will bring no change to the direct ownership of these credit institutions, but it will streamline the ownership structure of the Raiffeisen Bank International AG Group.

The Council also approved the proposals that Hrvoje Draksler remain Chairman of the Management Board of J&T banka d.d. Varaždin, put forward the bank’s supervisory board, that Nikola Mikša be appointed as Member of the Management Board of OTP banka Hrvatska d.d. Split and that Zdravko Anđel be reappointed as Chairman of the Management Board of Wüstenrot stambena štedionica d.d., Zagreb.