ZAGREB, March 21 (Hina) - The Croatian National Bank's Governor Marko Skreb on Tuesday presented a report on the Croatian banking in 1998 and the first half of 1999 before the Sabor's finances and budget committee and economy and
reconstruction committee. The Governor said that following a long-standing fall, the savings in Croatian banks had been increasing since the spring in 1999. Skreb asserted that Croatia, which has the foreign debt of nine billion dollars, is not an overindebted country according to any criteria. He recalled that the previous Government had set up a group called "money hunters", whose task was to trace money which had disappeared from three banks. Skreb did not say which were those banks, but according to some estimates, million of German marks had out-flowed abroad. Figures are certainly double-digit or may be even triple-digit. However, cooperati
ZAGREB, March 21 (Hina) - The Croatian National Bank's Governor
Marko Skreb on Tuesday presented a report on the Croatian banking in
1998 and the first half of 1999 before the Sabor's finances and
budget committee and economy and reconstruction committee.
The Governor said that following a long-standing fall, the savings
in Croatian banks had been increasing since the spring in 1999.
Skreb asserted that Croatia, which has the foreign debt of nine
billion dollars, is not an overindebted country according to any
criteria.
He recalled that the previous Government had set up a group called
"money hunters", whose task was to trace money which had
disappeared from three banks. Skreb did not say which were those
banks, but according to some estimates, million of German marks had
out-flowed abroad. Figures are certainly double-digit or may be
even triple-digit. However, cooperating with certain
international institutions Croatia will be able to receive a part
of that money back, he claimed.
Since 1998, labelled as a black year of the Croatian banking, the
central bank has taken a series of measures for speedier and more
efficient and direct control over banks. Therefore, the banking
system has stabilised and restored the confidence of citizens.
According to first estimates, last year Croatian banks recorded the
profit of 790 million kuna (approximately 100 million US
dollars),and out of some 50 banks only 11 had losses last year.
Following the long-standing growth, Croatia's economy registered a
one-percent fall in 1999. Although there are indications of the
economy's coming to normal, it is still too early to speak of its
recovery. The Gross Domestic Product (GDP) is expected to rise by
2.5 percent this year. An inflation rate should remain at four
percent, Skreb maintained.
One of positive trends is the fall in the current account' deficit
in recent years and in 1999 the deficit came to some $ 1.4 billion,
or seven percent of the GDP, while in 1997 it was 12 percent. Now,
this deficit is almost completely covered with direct foreign
investments, Skreb added.
Last year, foreign investments reached $1.3 billion, generally
thanks to the privatisation of the Croatian Telecommunications.
It is predicted that the current account's deficit will be in the
future covered with foreign investments, as against previous years
when it was covered with foreign debts.
Croatia, with the foreign debt of nine billion dollars, cannot be
treated as an overindebted country according to any criteria,
because the share of that debt in the GDP is only 45 percent, while
many countries have much higher such indicator, Skreb explained.
He also believes that there is no need for Croatia to reschedule its
foreign debt as Zagreb can carry out its servicing regularly.
The Governor commented on the exchange-rate policy and said that
this year there was no reason for a significant depreciation of kuna
against euro. On the other hand, if the coming tourist season yields
good results, what is being expected and if the Government
continues with the privatisation process, problems can occur how to
prevent the strengthening of kuna, Skreb said.
(hina) mm ms