According to available indicators, the economic activities in the second quarter of 2005 was more dynamic than the previous trimester. Consumer prices are within the expected scale, and a possible rise can be caused to the largest extent by a rise in oil prices, the HNB said in a press release today.
The exchange rate of the national currency kuna has been stabilised and since mid-June, the central bank has not had to intervene on the foreign currency market. The central bank's activities are now focused on operations on the open-end market which have reached a record high 3.6 billion kuna.
The projections of the monetary policy for the rest of the year are based on the assumption that the budgetary deficit accounts for 4.2 percent of Gross Domestic Product and that the government acquire the necessary funds only on the domestic market.
In the banking sector the reached level of debts from abroad should be maintained.
The deficit in the current account is put at about 4.7 percent provided that the budgetary deficit will 4.2 percent of GDP and that growth in exports is higher than in imports, with a certain increase in revenue from tourism.
The HNB Council also made a new decision on conditions and terms of carrying out transactions with foreign countries. The conditions and terms are now more adjusted to the directives of the European Union.