ZAGREB, Apr 27 (Hina) - Croatia's economic growth this year might revolve around 3.6 or 3.8 percent, after the relatively strong 5.2 percent recorded in 2002, analysts of Zagrebacka Bank and HVB Bank Croatia estimate.
ZAGREB, Apr 27 (Hina) - Croatia's economic growth this year might
revolve around 3.6 or 3.8 percent, after the relatively strong 5.2
percent recorded in 2002, analysts of Zagrebacka Bank and HVB Bank
Croatia estimate. #L#
Both banks say last year's Gross Domestic Product growth was
spurred by a strong increase in personal consumption, assisted by
credit expansion, which will not be the case this year, if only
because of central bank measures aimed at curtailing the increase
in bank loans.
The considerable credit expansion, which last year grew by more
than 30 percent, raised Croatia's foreign debt, which urged the
national bank to limit the growth of loans to 16 percent and decree
that banks must have 35 percent of their foreign exchange
liabilities covered by currency assets on a daily basis.
The decision to cover said liabilities led to a depreciacion of the
domestic currency in this year's first trimester, when the central
bank was forced to make six foreign currency interventions to
defend the kuna-euro exchange rate, HVB Bank Croatia analysts say.
Banks' additional demand for foreign currency, resulting from
their efforts to comply with the decision, upped the pressure on the
kuna.
Other significant indicators for 2002 refer to foreign trade --
imports grew by 8.8 while exports only by 1.2 percent. Owing to the
economies in Croatia's principal foreign trade partners -- the
European Union nations -- exports this year are not expected to
increase significantly.
Zagrebacka Bank analysts say the war in Iraq will further delay the
improvement of both the world and the EU economy, keeping domestic
demand the generator of this year's economic growth in Croatia.
Taking into account the limited credit expansion's effect on
personal consumption, as well as the anticipated slowing down in
investments, analysts expect GDP growth to slow down as well.
However, 2004 should be more successful than this year --
Zagrebacka Bank anticipates an economic growth of 4.5 percent and
HVB Bank Croatia one of 3.5 percent.
(hina) ha