Economic activity at the beginning of this year continued to stagnate, while better financing terms and low oil prices are expected to improve it. GDP in Q1 could contract mildly.
The year-on-year decline of the consumer price index slowed down in February, with only energy making a negative contribution to inflation.
The central bank made foreign currency interventions to maintain the kuna-euro exchange rate, continuing to stimulate lending, which is affected because of weak domestic demand and the continuation of household deleveraging.
In Q4 2014, bank lending markedly increased, but solely to the state, while corporate and retail lending decreased.
Thanks to the lending increase, for the first time since Q2 2008, the share of bad loans decreased from 17.24% at the end of Q3 2014 to 16.95%.
Banks' assets mildly decreased and their deleveraging towards foreign owners continued.
In 2014, banks made HRK 2.5 billion in profits, as against HRK 695.4 million in 2013.
(EUR 1 = HRK 7.6)