Prices and exchange rate stable in 2003

Published: 18/12/2002

At the meeting held on Wednesday, December 18, 2002 the Council of the Croatian National Bank, chaired by the Governor Dr Željko Rohatinski, adopted the monetary policy projection and central bank financial plan for the next year and approved the nominations for members and chairmen of the management boards of three banks.

Despite the high growth of basic monetary indicators and bank lending, and a dynamic economic activity reflected in about 4 percent growth of GDP, this year the central bank succeeded in achieving its main goal - price stability accompanied by exchange-rate stability. Undoubtedly, the central bank interventions on the foreign exchange market, aimed at offsetting the appreciation pressures, contributed to this successful record. The interventions resulted in the purchase of about EUR 700 million, and it was the first time that the gross international reserves exceeded USD 6 billion.

Macroeconomic stability is expected to continue in the next year, with a forecast 4.2 percent growth of GDP, stagnant imports and moderately growing exports. If the government deficit remains within the estimated 5 percent of GDP, which should largely be financed by the domestic market, and if no excessive external shocks occur, the Croatian National Bank expects no inflationary or depreciation pressures that could not be controlled by its currently available monetary policy instruments. Under such circumstances, the central bank would have to take additional measures to maintain exchange-rate and price stability only in case of a further growth in bank lending based on foreign borrowing rather than on domestic savings.

At the Wednesday meeting, the CNB Council approved the nominations of Mr. Antun Belušić as member of the Management Board of Istarska kreditna banka d.d. Umag, Mr. Nenad Jeđud as chairman and Mr. Siniša Radaković as member of the Management Board of Međimurska banka d.d. Čakovec. Mr. Franjo Luković was given approval for a second term of office as chairman of the Management Board of Zagrebačka banka d.d. Zagreb, with Mr. Alessandro Decio, Mr. Milivoj Goldštajn, Mr. Zvonimir Jurjević, Mr. Nikola Kalinić, Mr. Damir Odak, Mr. Tomica Pustišek and Ms. Sanja Rendulić as the Management Board members.