The bank's CEO believes that Croatia has a solid macroeconomic basis for development: its fiscal deficit is lower that the European Union average, the share of the public debt (excluding guarantees) is not reason for concern but, he said, the trend of its increase is worrisome.
As regards the external debt, its considerable part refers to the corporate sector, Prka said, recalling that the country's foreign currency holdings are EUR 11.5 billion plus reserves of commercial banks.
He holds that Croatia lacks a political consensus on the direction of the country's development and a stronger vision of development with a new industrial policy as well as a better co-ordination of the fiscal, monetary, real and financial sectors.
In such a situation, banks have grown cautious towards risks and reduced their credit exposure towards companies facing problems of declining revenues, he said.
However, he announced an increase in the placement of this bank's loans to companies, particularly to small and medium-sized businesses, in 2011, with a reduction of credits approved to the state sector. He added that interest rates should continue to mildly decrease.
The PBZ projects Croatia's economic growth to be 1.4 percent next year.