Wednesday, 21 July 2021

Croatian National Bank (HNB) Currency Committee Proposes Five Motifs For Euro Coins

ZAGREB, 21 July, 2021 - The Croatian coat-of-arms, a geographical map of Croatia, the marten (Croatian: kuna), the Glagolitic script and Nikola Tesla are motifs proposed for the Croatian side of euro coins, the Croatian National Bank (HNB) said on Wednesday.

The HNB Currency Committee today defined the final proposal for motifs for the national sides of future Croatian euro coins, which will now be considered by the National Council for the Introduction of the Euro as Official Currency in the Republic of Croatia, and then the government will adopt a conclusion.

The Croatian coat-of-arms will be used as a background on all coins, and other motifs will be used on coins of different denominations so that the 2 euro coin will feature a geographical map of Croatia, the 1 euro coin the marten, the 50, 20 and 10 cents coins Nikola Tesla, and 1, 2 and 5 cents coins the Glagolitic script.

The HNB said the main criteria for the selection was that the motif is acceptable to the general public and that it is a national symbol.

The rating given by citizens via an online survey at euro.hr, in which nearly 50,000 citizens took part, and a structured national survey on a sample of 1,000 citizens also influenced the Committee's final decision.

Based on the selected motifs, the HNB will announce a tender for the design of the national side of the euro coin. In mid October, the HNB will send the design of the motifs to the European Commission and the Council of the European Union, the press release said.

The production of euro coins with the Croatian national side should start at least six months before the introduction of the euro, that is the decision of the Council of the EU that Croatia is introducing the euro.

For more about politics in Croatia, follow TCN's dedicated page.

Wednesday, 21 July 2021

Croatian National Bank (HNB): 85% of Croats Hold at Least One Payment Card at End Of 2020

ZAGREB, 21 July, 2021 - At the end of 2020, 3.45 million Croatian consumers had at least one payment card, which means that of 4.05 million residents, 85% possessed cards for cashless payment,  according to the data provided by the Croatian National Bank (HNB).

The HNB's publication on cards and card transactions in 2020 shows that as many as 8.78 million such cards were registered at the end of 2020, which was down by 4.5% compared to the end of 2019.

Thus, 85% of the population held at least one payment card, more than 29% held at least two payment cards, and 17% three cards.

 Also, 240,264 payment card holders were business entities.

The HNB says that 4.83 million cards were used during 2020, 3.55 million were unused and 0.55 million were blocked.

As many as 6.92 million cards were debit cards (79%), up 0.41%. The remaining 21% (1.85 million) were credit cards, down by 20.32% compared to the end of 2020.

This decline in the number of credit card was ascribed by the HNB to the business decision of American Express to leave Croatia's market.

The HND data shows that there were 21 credit institutions and two electronic money institutions as payment card issuers in Croatia last year.

For more about business in Croatia, follow TCN's dedicated page.

Sunday, 18 July 2021

HNB Governor: Croatia's Q2 GDP Growth Rate Likely to Be About 18%

ZAGREB, 18 July, 2021 - The Croatian National Bank (HNB) Governor, Boris Vujčić, said on Sunday that Croatia's economy would likely reach a growth rate of about 18% in the second quarter of 2021, which was partly due to the low base in the Q2 2020 when the country had experienced a strong downturn.

Vujčić told the press in Dubrovnik where he had formally opened the 27th international economic conference, that Croatia's economic activity for the whole of 2021 would likely rebound at a rate of 6.8%, however, the epidemiological situation caused by the COVID pandemic still created uncertainties.

Vujčić explained that in the worst-case scenario, the GDP could rise by 4.8% in 2021.

The governor underscored a significant role of the government that provided job-retention grants which helped save jobs and made it possible for the recovery to be faster.

The crisis has made the ongoing digitisation processes faster, prompting remote working. I expect a large number of people to go back to work sites. Only after all things go back to normal, we will be provided with the real picture regarding the labour market that has behaved during the pandemic differently than during the big financial crisis in 2009 and 2010. In Croatia, we have already reached the 2019 levels in terms of employment figures and we are now faced with the recurring problem of shortage of skilled workforce, he said.

Commenting on the European Union's Next Generation plan, he said that that would be crucial for the economic recovery in the medium term.

In the next two years, the maximum of available funds will be tapped, and this amount of the funds withdrawn from the EU will have a positive impact on Croatia's GDP, according to his explanation.

The 27th Dubrovnik Economic Conference brought together about 70 experts and researchers from abroad and Croatia as well as representatives of financial institutions, central banks and the financial sector.

Some of the topics on the agenda of the conference are the further strengthening of the role of the state, particularly through the EU Next Generation programme, exchange mechanisms, corporate bankruptcies and so on.

For more on business in Croatia, follow TCN's dedicated page.

For more about Croatia, CLICK HERE.

Wednesday, 30 June 2021

Croatian National Bank (HNB): Current Account Balance Payment Runs €1.26bn Deficit in Q1

ZAGREB, 30 June, 2021 - The current account of the balance of payments ran a deficit of €1.36 billion in the first quarter of 2021, thus narrowing the gap by €23.3 million or 1.7% from the same period of 2020, according to figures the Croatian National Bank (HNB) released on Wednesday.

A surplus on the capital account increased by 20.9% or €45 million in Q1 to €260 million.

As a result, the balance of payments of the current and capital accounts in Q1 generated a deficit of €1.1 billion, which is €100 million less than in the corresponding period in 2020.

"That improvement is exclusively the result of the surplus in the secondary income and capital transaction accounts due to a marked increase in net income from transactions with the EU budget. The favourable trend of absorbing EU budget funds, however, on the most part were annulled by a pronounced deterioration of balance of primary income accounts and, to a lesser extent, by the decreased net export of services," according to HNB analysts.

For more about business in Croatia, follow TCN's dedicated page.

Wednesday, 23 June 2021

Total Household Loans Reach HRK 137.5 Bn in April

ZAGREB, 23 June, 2021 - Total household loans in Croatia reached HRK 137.5 billion at the end of April 2021, increasing by HRK 3.6 billion from April 2020, Raiffeisen Bank (RBA) said in its recent analysis of data provided by the Croatian National Bank (HNB).

The annual nominal household loan growth rate was 2.7%, picking up from 1.6% in March 2021.

The share of kuna-denominated loans in total loans was 55%, and the nominal amount of loans was affected by the euro-kuna exchange rate, which was 0.4% lower on an annual level and 0.1% lower on a monthly level.

Compared with December 2020, household credit claims in April 2021 increased by 1% or HRK 1.35 billion as a result of a rise in the nominal value of housing loans and the impact of housing subsidy schemes on them.

Housing loans accounted for 46.4% of total household loans, reaching HRK 63.8 billion, up by 1.61 billion from the end of 2020. The annual growth rate picked up from 8.3% in March to 9% in April.

On the other hand, general-purpose cash loans, despite a slight monthly rise of 0.2% to HRK 52.5 billion, were 1.4% lower than in April 2020, while increasing by 0.5% compared with the end of 2020.

RBA analysts expect that the rise in household loans will continue this year on the back of subsidised housing loans and the need for funding for the reconstruction of housing damaged in last year's earthquakes.

With the easing of COVID-19 restrictions and the acceleration of economic activity, there will be an increase in demand for cash loans, but this year it will be more modest than two-digit growth rates seen between mid-2018 and the outbreak of the coronavirus pandemic, RBA said.

(€1 = HRK 7.5)

For more about business in Croatia, follow TCN's dedicated page.

Sunday, 20 June 2021

CNB Removes Certain Croatian Banknotes From Circulation

June the 20th, 2021 - Have you checked your jacket pockets and old wallets lately? If you've got any of these Croatian banknotes lying around, you've only got a certain amount of time to get them exchanged as the Croatian National Banks begin removing them from circulation.

As Poslovni Dnevnik writes, the Croatian National Bank has so far withdrawn seven series of 5, 10, 50, 100 and 200 kuna banknotes, six of which were issued back in 1993 and one two years later. To date, however, 9.5 million such invalid Croatian banknotes, out of a total of more than three hundred million printed, are still in circulation.

The highest number of invalid banknotes (11 percent) in denominations of five kuna each were issued back in 1993. This banknote is primarily green with the image of Petar Zrinski and Fran Frankopan. The nominal value of this most invalid banknote stands at around 17 million kuna, writes Vecernji list.

The CNB pointed out that 750 of these oldest paper Croatian banknotes have been returned to them over the last year, and they have been exchanged for the same value. In the last year alone, the CNB received a total of 17,706 invalid Croatian banknotes, including 3,923 200 kuna banknotes bearing the image of Stjepan Radic.

In the year dominated by the ongoing coronavirus pandemic, many people seemed entirely unaware that you haven't been able to spend some of these notes for as long as ten years now. The value of the old 200 kuna note in the last year stood at as much as 784,600 kuna. The total value of all returned Croatian banknotes exchanged from May 2020 to the end of May this year was around 1.44 million kuna in total!

A year ago, about 2,800 ten kuna banknotes, 1,707 20 kuna banknotes, a little more than five thousand old 50 kuna banknotes and a little more than three thousand old one hundred kuna banknotes were ''dusted off'' and returned.

The Croatian National Bank will replace all invalid kuna banknotes free of charge and without a time limit to anyone who brings them in person to the CNB box office at 5 Franjo Racki in Zagreb, or sends them in by mail.

For more, follow our lifestyle section.

Sunday, 20 June 2021

Croatian National Bank Pumps 900 Million Kuna into System

June the 20th, 2021 - The Croatian National Bank (CNB/HNB) has pumped a huge amount into the system for the second time since this year began as the economic situation globally continues to be rocky.

As Poslovni Dnevnik/Ana Blaskovic writes, for the second time this year, the Croatian National Bank has needed to intervene in the foreign exchange market to correct the exchange rate of the domestic currency (kuna) against the euro.

The central bank bought 120 million euros from commercial banks on Wednesday at an average exchange rate of 7.497346, pumping 900 million kuna back into the Croatian financial system.

Although there were no significant slips to speak of in the market before, the supply of the banking sector slightly pulled the exchange rate from 7,488 down to 7,485, but after a continuous appreciation in the previous month, the Croatian National Bank, as the regulator, decided to intervene and make the move.

While the second intervention this year resulted in the ''printing'' of Croatian kuna, when the previous such intervention took place back in April, the Croatian National Bank made a withdrawal from the system. With the sale of 190 million euros to banks, around 1.44 billion kuna in total was withdrawn, which stabilised the exchange rate back then at the level of 7.570405 kuna.

On Thursday, the middle exchange rate of the euro on the exchange rate list of the Croatian National Bank (which has been applied since Friday) reached 7.484807 kuna. When we last saw these levels, it was mid-August last year at the very peak of the tourist season, which ended very abruptly shortly after when Croatia unfortunately ende up being placed on the red lists of most countries from which the tourists were typically arriving here from.

This year, a better yet still wobbly summer season is expected than last year, and with it the inflow of euros, which will, as every year at that time, push the kuna exchange rate down. It should be noted that by joining the exchange rate mechanism, Croatia undertook to keep the exchange rate in the range of +/- 15 percent around the central parity of 7.53450.

For more, follow our business section.

Saturday, 12 June 2021

One in Three Cities, Municipalities Have Too Few Residents - Večernji List

ZAGREB, 12 June, 2021 - As many as 72% of cities and 76% of municipalities in Croatia have fewer residents than is optimal considering their economic potential and volume of services, the Večernji List daily issue of Saturday says.

This conclusion is the result of a study made by Croatian National Bank (HNB) researchers Antonija Biljan, Milan Deskar Škrbić and HNB deputy governor Sandra Švaljek, focusing on the optimal size of local government units, which is a rare research topic in Croatia.

Zagreb was not included in the analysis due to a number of particularities, and the analysis shows that cities should not have fewer than 15,000 residents (15,139) while the optimal number of residents for a municipality is 3,744. Only one in four cities or municipalities meet that criterion.

The study was published after the recent local election and its authors put forward several recommendations for politicians, suggesting voluntary merging of the smallest local government units or interest-based cooperation between neighbouring municipalities.

There are 556 local government units in Croatia, of which 127 are cities and 428 municipalities. The City of Zagreb has a special status of city and county.

Only 35 cities have more residents than the optimal number, as do 102 municipalities. The budgets of all local government units amount to around HRK 28 billion.

The country's existing territorial organisation is not based on a historical administrative division but is a result of discretionary decisions by policy makers in the early 1990s, the authors of the study say.

Considering the size of territory, population, fiscal capacity, system of financing and functions of local government units, many domestic experts warn that the current territorial structure is inefficient and calls for their merger.

The HNB study focused on population density, demographic structure of local residents, socioeconomic factors such as the amount of taxable income and unemployment rate, as well as transfers from the central government, the daily says.

For more on politics in Croatia, follow TCN's dedicated page.

For more about Croatia, CLICK HERE.

Tuesday, 18 May 2021

Croatian Economic Situation Picks Up During First Quarter of 2021

May the 18th, 2021 - The Croatian economic situation has been picking up throughout the duration of 2021's first quarter, as demonstrated by a rapid assessment of GDP done by the central bank.

As Poslovni Dnevnik/Ana Blaskovic writes, the Croatian economic situation accelerated in the first quarter of the year between the two coronavirus pandemic waves, as illustrated by the model of a rapid assessment the country's GDP by the central bank in some new information on economic trends.

Industrial production, from 0.8 percent in the last quarter of last year, accelerated to 4.5 percent thanks to the production of non-durable consumer goods. This is indicative that an upward trend was also observed across other major industrial groups, with the exception of the production of durable consumer goods, which stagnated.

The beginning of this year also brought momentum in the Croatian retail sector (6.6 percent compared to 5.9 percent at the end of the year). The data for February suggests the continuation of growth in construction activities of 3.9 percent on a quarterly basis with an increased volume of work.

With the third wave of the ongoing coronavirus pandemic then striking, the feeling of relief and cautious optimism sank in part, but not equally among everyone, which only further highlights the fact that this crisis continues to affect individual industries and sectors very differently.

Back in April, business expectations in industry improved when compared to the previous, unstable month of March, they stagnated in construction, and they unfortunately deteriorated sharply in trade and services.

One major indicator of the health of the Croatian economic situation is the (admittedly traditionally very seasonal) employment rate. There has been, at least as yet, no major change in the country's employment rate. In the first three months of 2021, the number of Croatian employees was 0.9 percent higher, and only a tenth of those employees were being covered by government measures initially introduced last year to try to preserve jobs. The domestic unemployment rate then rose to 8.5 percent in March 2021.

Monthly inflation rose 1.1 percent in the same month due to seasonal growth in clothing and footwear prices, higher excise duties were placed on tobacco products and oil became more expensive out on the global market. The Croatian National Bank stated that foreign trade also slowed down rather significantly.

After a jump in exports (of 6.2 percent) and imports (of 6.6 percent) in the last quarter of pandemic-dominated 2020, the pace of exports in January fell to 3.2 percent, while imports (mainly of petroleum products) increased by 1.8 percent. Although exports surpassed imports, due to a significantly larger import base, the foreign trade deficit increased by 6.2 percent.

For more on the Croatian economy, follow our dedicated business section.

Friday, 14 May 2021

Croatian Economic Recovery Certain, National Bank Warns of Threats

May the 14th, 2021 - Croatian economic recovery is certain, and with the vaccination rollout across the country and indeed the rest of the world, particularly in Croatia's emitting markets picking up, the situation with the domestic economy is slowly but surely regaining strength. Despite that, the Croatian National Bank (CNB/HNB) has warned of threats.

As Poslovni Dnevnik/Ana Blaskovic writes, Croatian economic recovery has actually been happening at a far more rapid pace than most could have ever predicted just a few months ago, but the financial system remains exposed to significant risks due to strong public debt growth, inflation in terms of property and the risk of what are known as zombie businesses - all of which are the undeserving victims of the pandemic.

The CNB Council warned that fiscal policy, among other measures, contributed to mitigating the effects of the ongoing coronavirus pandemic, and the decline in revenues and generous support for the Croatian economy spilled over into a jump in public debt (with increased interdependence between banks and the state itself). For the time being, the risks of government financing are mitigated by low risk premiums and favourable financing conditions, as well as generous European Union (EU) funds which have been made readily available.

The problem that has been snowballing for some time now is the warming up of the situation in the real estate market. Although they don't explicitly mention inflation, the CNB points out that "high and rapidly rising residential property prices are increasingly being separated from the economic values ​​that should determine them". The number of transactions during the pandemic decreased somewhat, but prices only slightly slowed growth on the wave of cheap money, government subsidies and stable levels of employment and income.

Housing loans have been growing rapidly, and although they're granted with prudent lending conditions, "part of the loan shows increased repayment ratios to income, which in unfavourable circumstances may exacerbate the effects of disturbances in the real estate market."

Finally, with the longer duration of the coronavirus pandemic and fiscal stimulus associated with it, the threat of corporate sector zombification grows. Parts of the economy continue to suffer from anti-epidemic measures, and while premature repeal of some measures can jeopardise healthy enterprises, those companies with unsustainable business models can also actuallt benefit from maintaining them for too long

. "This may reduce corporate dynamism and zombify the corporate sector, with unfavourable implications for Croatian economic recovery, growth and financial stability," the CNB warned.

For more, follow our lifestyle section.

Page 1 of 10

Search