The central bank does not expect these measures to have a more significant effect on the increase of interest rates on bank loans, which will depend on the conduct of banks, which may reduce their profit to neutralise increased costs of a more significant rise in granted loans and more expensive loan sources in the European Union.
The introduction of these "shock" measures is necessary to stop or significantly slow down the unsustainable growth of the foreign debt and current account deficit and their share in GDP, said HNB Governor Zeljko Rohatinski.
Croatia's foreign debt at the end of this year will amount to 28.7 billion euros, which is 12% more than in 2005 and accounts for 85% of GDP in relation to 82.5% in 2005. The current account deficit will exceed eight percent of GDP, while in 2005 it was 6.4% of GDP.
This year the state debt has decreased, with the state seeking more loans on the domestic market. The foreign debt of banks this year has risen by some 700 million euros (in 2005 it rose by 1.3 billion euros), while the foreign debt of companies has increased by as much as 33% (last year it was 23%).
Stopping the unfavourable trends demands concerted efforts by all economic factors in the country, the HNB said.
Along with the measures that have been taken, the central bank believes that next year's economic growth could be between 4.5% and 5%, with inflation remaining below 3% and the foreign debt stagnating at some 86% of GDP and the current account deficit decreasing to 7.5%.
If these projections are not respected, the share of the foreign debt could reach some 90% of GDP, while the current account deficit could reach 9% of GDP, Rohatinski said.
The central bank estimates that certain positive changes have been achieved in 2006, but that Croatia's economy was one with growing imbalances.
Rohatinski said that the positive changes were reflected in a 4.6 percent rate of economic growth, inflation slowing down to 2%, and the budgetary deficit dropping to 3% of GDP. Measures taken by the HNB have slowed down the growth of loans sought by banks from 17% in 2005 to below 8% this year.
However, economic growth was exclusively the result of a fast growth of domestic demand, primarily investments and personal consumption, while the contribution of net exports was negative, by 1.7 percentage points, which indicates very big foreign trade restrictions for a possibly faster economic growth.
Along with limited export capacities, the foreign trade deficit has been continually increasing, with growing dependence on imports, the HNB warns.