ZAGREB, Sept 1 (Hina) - The Croatian National Bank (HNB) Council on Wednesday discussed the latest economic and financial developments. Members of the HNB Council were unanimous in the assessment that preserving the stability of
prices and the exchange rate should remain a priority task of the central bank. The session paid special attention to those indicators which could be an obstacle to fulfilling that task in the future. According to a statement issued after the session, according to one of those indicators July was the seventh month this year which saw a negative balance on the state budget account, amounting to almost 4 billion kuna (DM1.030 billion). One should take into account that during the remaining part of 1999 there should be a gradual reduction of the state's indebtedness with the central bank, the statement said. Although they stress the need for lifting the tax b
ZAGREB, Sept 1 (Hina) - The Croatian National Bank (HNB) Council on
Wednesday discussed the latest economic and financial
developments.
Members of the HNB Council were unanimous in the assessment that
preserving the stability of prices and the exchange rate should
remain a priority task of the central bank. The session paid special
attention to those indicators which could be an obstacle to
fulfilling that task in the future.
According to a statement issued after the session, according to one
of those indicators July was the seventh month this year which saw a
negative balance on the state budget account, amounting to almost 4
billion kuna (DM1.030 billion). One should take into account that
during the remaining part of 1999 there should be a gradual
reduction of the state's indebtedness with the central bank, the
statement said.
Although they stress the need for lifting the tax burden, members of
the Council cannot see how tax rates can be reduced without major
changes in the distribution of the gross national product and in the
structure of the overall social spending, especially in the period
when there has been no expected revival of economic activity.
Industrial production in the first seven months of 1999 was 1.9 per
cent lower than in the same period last year. Exports in the first
seven months of this year, expressed in US dollars, were 5.2 per
cent lower, while imports decreased by 9.2 per cent, which means
that the deficit in foreign trade has been decreasing but the
overall trade has been decreasing also. Results of the tourist
season are still not complete but it is already known that they are
poorer than last year and that the downward trend has also continued
in retail trade. The unemployment rate in the first seven months of
1999 was on the average 9.3 per cent higher than last year, and in
late July it was 16.5 per cent higher than the year before.
Despite such a situation, salaries have been increasing. The
average net salary in July amounted to DM793, which is a nominal
increase of 14.1 per cent, and a real increase of 9.5 per cent,
compared to last year.
According to the State Bureau for Statistics, the annual increase
in retail prices amounted to 5.1 per cent. There were no major
oscillations in the exchange rate.
International reserves which are managed by the central bank amount
to almost 2.9 billion US dollars, which is more than last year.
The average interest rate on loans in June was considerably
decreased, so that the interest rate on kuna loans amounted to 13.8
per cent, which is the lowest level since Croatia gained its
monetary independence. It is estimated that the development of
interest rates reflects to a considerable extent the fact that some
problem-generating banks have gone bankrupt.
Encouraging indicators certainly include a June increase in
foreign exchange saving in Croatian banks, the statement
concluded.
(hina) rml