ZAGREB, Feb 4 (Hina) - The strict measures introduced by the Croatian National Bank to curb the growth of loans issued by commercial banks will certainly slow down the growth of loan activity, the Croatian Employers' Association (HUP)
noted in its Economic Monitor report, estimating that this would "cool down" business activities by slowing down the growth of spending and reducing pressure on the balance of payment.
ZAGREB, Feb 4 (Hina) - The strict measures introduced by the
Croatian National Bank to curb the growth of loans issued by
commercial banks will certainly slow down the growth of loan
activity, the Croatian Employers' Association (HUP) noted in its
Economic Monitor report, estimating that this would "cool down"
business activities by slowing down the growth of spending and
reducing pressure on the balance of payment. #L#
This will make the overall effects on businesses and citizens
rather unpredictable. The question remains how much such measures
by the monetary authorities will actually slow down the growth of
loans and banks' foreign debts without significantly affecting the
movement of interest rates and liquidity in the domestic banking
sector, it is noted in the report.
Apart from a Gross Domestic Product real growth rate of 3.5 to 4%,
this year is expected to see a mild increase in employment, a
moderate growth of salaries and living costs, low inflation, a
stable currency, the realisation of projected fiscal movements and
a significant slowing down of loan growth.
At the same time, the prospect of parliamentary elections gives
rise to uncertainties regarding their effect on the economy, which
could slow down privatisation, delay structural reforms, and
result in yielding to pressures for increased salaries in some
segments of the public sector, it is noted.
GDP in the third quarter of 2002 increased by 6.5% compared to the
same time in 2001, which is the highest growth rate since 1997. The
growth was generated by strong domestic demand, with personal
spending having increased by 7.1.% and investments by 15.9%.
However, the export of goods stagnated, while imports saw a major
increase. The export-import ratio in the first 11 months of 2002
dropped to a record low of 45.3%.
The CROLEI forecast index has been stagnating significantly in
recent months, which indicates uncertainty regarding the short-
term prospects of the Croatian economy, reads the report.
(hina) rml sb