CRO NATIONAL BANK: BASIC INDICATORS OF STABILITY STILL SATISFACTORY

ZAGREB, Feb 9 (Hina) - The Croatian National Bank (HNB) Council on Wednesday assessed that macroeconomic trends registered so far in the field of real domestic gross product (GDP) and employment were stabilising and that the basic indicators of stability were satisfactory. At a session chaired by HNB Governor Marko Skreb, the HNB Council discussed monetary and economic trends and foreign investments. The exchange rate of the kuna in relation to the German mark fell in January by 0.43 percent, which is considerably less than in the same period of 1998 and 1999, when the kuna decreased in value one percent and 0.9 percent respectively. Expressed in movements of the nominal effective exchange rate, the kuna decreased in value by 0.46 percent. In comparison to January 1999, retail prices this year rose by 4.6 percent whereas living costs increased by 3.8 percent. Producer prices increased by 7.6 percent mostly due to a considerable rise in the price of oil products. In a debate about the role of foreign investments in the development of economy, Council members said it was extremely important to conduct the necessary structural reforms in conditions of a stable exchange rate so that foreign investments into small open economies - such as Croatia's - may sooner result in an increase in exports, thus increasing the country's GDP. (hina) rml