INFLATION CONTINUES TO BE LOW, STABLE EXCHANGE RATE

ZAGREB, June 11 (Hina) - At a meeting on Wednesday the Advisory Board of the Croatian National Bank examined economic and fiscal movements in the past quarter of this year. The Board approved a request by Rijecka Bank to merge with the Erste und Steiermaerkische Bank, the Croatian National Bank reported on Wednesday. #L# The inflation rate continues to be very low with an annual rate of 0.9 per cent while the exchange rate remains stable even without the central bank's intervention on the foreign currency market. Available data lead to the conclusion that loan activities by banks are still dynamic however its growth has slowed down compared to the preceding period. The current deficit in the payment balance for the first quarter amounted to 1.006 million dollars while last year this was 875 million dollars. Statistical data for the first quarter this year compared to the same period last year indicate a high growth in exports of goods and services. Exports of goods amounted to 1.4 billion dollars which is equivalent to a nominal annual growth rate of 39.7 per cent. The same applies to the growth of goods exports (valued at 2.9 billion dollars or an annual increase of 37.2 per cent). In order to obtain a more realistic view of these figures it needs to be taken into account that this growth is also a result of the depreciation of the dollar by about 22 per cent compared to the euro and about 20 per cent compared to the Croatian kuna. This is the same reason for the growth in last year's debt which amounted to 2.1 billion dollars which are attributed to inter-value changes however, 1.5 billion dollars is the realistic increase in debts. Nevertheless, international reserves are continuing to grow and so Croatia is still a country with a strong international solvency, the central bank noted in its statement. The Croatian National Bank's Advisory Board approved a request by Rijecka Bank to merge with the Erste und Steiermaerkische Bank. (Hina) sp sb