Thursday, 22 April 2021

Central Bank Governor Boris Vujčić Says GDP Contracted By 7.8% in H1 2020

ZAGREB, 22 April, 2021 - As a consequence of the coronavirus pandemic and earthquakes real GDP in the first half of 2020 contracted by 7.8% year-on-year, due to a drop in personal consumption, investments and exports, while government spending rose mildly, Croatian National Bank Governor Boris Vujčić said on Thursday.

Vujčić said this in parliament while presenting the Croatian National Bank's (HNB) annual report on the financial situation and price and monetary policy stability in the first half of 2020.

He recalled that in the first half of 2020 a strong contraction of the global economy was recorded due to the spread of coronavirus and the introduction of restrictions. He added that the fall in real GDP in developed countries was the most pronounced during the peak of the spring pandemic wave.

Personal consumption contracted by 6.8% on the year, reflecting a decrease in available income due to negative trends on the labour market, a fall in the consumption of services whose provision of limited due to epidemiological restrictions as well as citizens' being less inclined to spend due to the need for physical distancing to avoid the risk of being infected and a decrease in consumer optimism. Those trends were also reflected in the lower indebtedness of the population, said Vujčić.

The annual inflation rate slowed down from 1.4% in December 2019 to -0.2% in June 2020 under the impact of the decreased prices of oil products, caused by the fall in global demand. The spread of the pandemic led to a decrease in inflationary pressure overall, notably in services related to tourism due to a significant drop in the number of passengers, and in durable consumer goods, due to a drop in investments. Basic inflation slowed down mildly from 1.2% in December 2019 to 1.1% in June 2020, which was mostly due to a drop in annual rates for individual food products and catering and accommodation services.

The contraction of economic activity due to the pandemic resulted in the import of goods falling at a significantly greater rate than exports, and the current and capital accounts in the first half of 2020 recorded a decrease in the deficit compared to the same period in 2019. On the other hand, the current and capital accounts were adversely affected by a significant drop in the net export of services, notably due to the situation in tourism.

HNB promptly adapted its monetary policies, using all the available measures with the aim of preserving the stability of the exchange rate and favourable conditions to finance citizens, the corporate sector and the state, said Vujčić. HNB sold a total of €2.7 billion to banks after which the kuna exchange rate was stabilised, he said.

Thanks to this and other measures kuna liquidity reached record levels and the state and private sector were able to continue taking loans with domestic banks under virtually the same terms as before the crisis, however, the weaker economic activity and demand for loans resulted in stricter terms to approve loans as a result of which consumer lending slowed down.

The budget deficit of HRK 13.2 billion in the first half of 2020 reflects the negative impact of the crisis caused by the pandemic on the economy and budget revenue. Temporary measures designed to relieve the consequences of the pandemic, such as the writing off of tax obligations and job-keeping support measures, also contributed to the fall in revenue. This is particularly obvious in the second quarter, when the deficit amounted to almost HRK 10 billion, HNB's report notes.

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Thursday, 22 April 2021

Connecting Economies of Croatia, Israel and BiH Cantons

ZAGREB, 22 April (Hina) - Diplomatic representatives of Croatia and Israel met with local cantonal authorities in Široki Brijeg in Bosnia and Herzegovina on Thursday to discuss joint economic projects for which Croatia has earmarked funds this year.

Non-resident Israeli Ambassador Noah Gal Gendler said after the meeting with government representatives and businessmen that he was exceptionally pleased with the talks.

"The objective is to exchange ideas and after that to include the private sector because they know how to very quickly recognise potential. As the state of Israel, as the state of Bosnia and Herzegovina, as cantons and naturally as the Republic of Croatia, we will support those efforts," said the ambassador. He expressed satisfaction that Israel will help the development of this area by sharing its knowledge and experience.

Diplomatic advisor in the Croatian Embassy in BiH Mladen Glavina underscored that this is about connecting business people and exchanging ideas between the three countries.

"Our aim is long term, to achieve in the next few years as many contacts as possible between business people on the three sides," said Glavina. This all started last year with contacts between the foreign ministries of Croatia and Israel and is continuing today, with concrete cooperation to follow, said Glavina, announcing that the Croatian government will assist in this trilateral cooperation and that certain funds have been allocated for it.

West Herzegovina Canton Prime Minister Zdenko Ćosić said that together with businessmen he would visit Israel in an effort to make way for their cooperation.

Representatives of Croatia and Israel visited three cantons in BiH that border with Croatia over the past three days in an effort to motivate economic cooperation between the three countries.

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Thursday, 22 April 2021

Zagreb Stock Exchange Main Indices Rise

ZAGREB, 22 April, 2021 - The main Zagreb Stock Exchange indices gained on Thursday, the Crobex by 0.30% to 1,883.42 points and the Crobex10 by 0.16% to 1,173.71 points, while regular turnover was HRK 8.5 million, twice as much as on Wednesday.

The most traded stock was Končar - Electrical Industry, turning over HRK 1.7 million. The price of its share was stable at HRK 685.

Forty-three stocks traded today, with 20 going up in price, nine going down and 14 staying the same as on Wednesday.

(€1 = HRK 7.567595)

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Thursday, 22 April 2021

Croatia With General Government Deficit in 2020, Ending 3-Year-Streak of Surplus

ZAGREB, 22 April, 2021 - The general government generated a consolidated deficit of HRK 27.5 billion, or 7.4% of GDP in 2020, with the consolidated general government debt also increasing, according to a report on which the national statistical office released on Thursday.

The deficit thus ended a three-year streak of surplus.

For comparison's sake in 2019 the government generated a consolidated government surplus of HRK 1.2 billion or 0.3% of GDP while in 2018 it amounted to HRK 863 million or 0.2% of GDP and in 2017, the surplus was HRK 2.8 billion or 0.8% of GDP.

The general government budget deficit occurred in 2020 mostly due to the repercussions of the COVID-19 pandemic for the national economy, which required the government's support measures to offset the impact.

The consolidated government debt in 2020 reached HRK 329.7 billion or 88.7% of GDP after that debt had gradually decreased for several years, the State Bureau of Statistics (DZS) said in the report. 

At the end of 2019 the general government debt amounted to HRK 292.9 billion, which accounted for 72.8% of GDP. In 2018 it was HRK 286.3 billion or 74.3% of GDP and in 2017 it was HRK 285.1 billion or 77.6% of GDP.

The general government debt increased by HRK 36.8 billion in 2020 or 12.6% year on year with HRK 32.8 billion being net loans and the remainder attributed to depreciation of the kuna currency exchange rate against the euro, DZS says in the report.

RBA: Results better than expected

Commenting on the latest DZS report, Raiffeisenbank Bank Austria (RBA) analysts underscored that the budget gap of HRK 27.5 billion is better than had been expected.

They also attributed the noticeable deterioration in fiscal metrics to the consequences of the crisis caused by the COVID-19 pandemic which resulted in a double-digit contraction in budget revenue while at the same time generating an increase in general government spending.

The total consolidated government revenue in 2020 amounted to HRK 178.5 billion, which is a decrease of HRK 12.5 billion or 6.5% while at the same time expenditure amounted to HRK 205.9 billion, which is HRK 11.3 billion or 8.6% more y-o-y.

(€1 = HRK 7.567595)

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Wednesday, 21 April 2021

Zagreb Stock Exchange Indices Down For Second Day in Row

ZAGREB, 21 April, 2021 - The Zagreb Stock Exchange (ZSE) indices dropped slightly on Wednesday, going down for the second day in a row, while turnover was somewhat higher owing to a block transaction with Končar - Electrical Industry shares.

The Crobex dropped by 0.09% to 1,877.80 points and the Crobex10 decreased by 0.28% to 1,171.80 points.

Regular turnover was HRK 4.4 million, around 600,000 less than on Tuesday, but total turnover was boosted by a block transaction with Končar Electrical Industry shares in the amount of HRK 3.4 million.

In regular trading, two stocks crossed the million kuna turnover mark, the Podavka food company, which turned over HRK 1.1 million and the Atlantska Plovidba shipping company, which generated a turnover of HRK 1.07 million.

Podravka traded at HRK 550 per share, a price increase of 0.56%, while Atlantska Plovidba rose by 5.77% to HRK 220 per share.

Thirty-seven stocks traded today, with 15 going down in price, 12 going up and 10 staying the same as on Tuesday.

(€1 = HRK 7.566672)

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Tuesday, 20 April 2021

Zagreb Stock Exchange Main Indices Down

ZAGREB, 20 April, 2021 - The main Zagreb Stock Exchange indices decreased on Tuesday, the Crobex by 0.12% to 1,879.46 points and the Crobex10 by 0.23% to 1,175.07 points, while regular turnover was HRK 5.8 million.

Only one stock crossed the million kuna mark, the Adris tourism and insurance group, turning over HRK 1.1 million. It closed at HRK 408 per share, up 0.25%.

Forty-one stocks traded today, with 18 going up in price, 11 going down and 12 staying the same as on Monday.

(€1 = HRK 7.560764)

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Tuesday, 20 April 2021

Ministry of Finance Sells HRK 2.34 Bn Worth of Treasury Bonds

ZAGREB, 20 April, 2021 - The Croatian Ministry of Finance sold HRK 2.34 billion worth of treasury bonds, which was by 139 million kuna higher than planned, at an auction on Tuesday,with an interest rate of a mere 0.02% for one-year-long bonds.

In advance of the maturity of HRK 2.55 billion worth of treasury bonds, the Ministry offered HRK 2.2 billion for subscription, HRK 2 billion with a maturity of one year and HRK 200 million with six months' maturity.

Financial institutions submitted bids totalling HRK 2.34 billion and the Ministry accepted all of them.

The Ministry issued HRK 2.34 billion worth of treasury bonds with a maturity of one year at an interest rate of 0.02%, which was the same interest rate as at the previous auction held on 2 March.

The balance of kuna-denominated bonds subscribed has decreased by HRK 212 million to HRK 14.32 billion.

(€1 = HRK 7.560764)

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Friday, 16 April 2021

Zagreb Stock Exchange Indice Drop for Third Consecutive Day

ZAGREB, 16 April, 2021 - The main Zagreb Stock Exchange (ZSE) indices weakened for the third consecutive day on Friday amid modest trading, the Crobex decreasing by 0.19% to 1,878 points and the Crobex10 by 0.28% to 1,176 points.

Both indices also ended in the red week-on-week -- the Crobex went down by 0.55% and the Crobex10 by 0.73%

Of the sectoral indices, the industrial index saw the biggest decline, of 0.5%, while the construction index was the only one to go up, by 1.53%.

Today's regular turnover was HRK 4.9 million, or HRK 600,000 less than on Thursday.

The stock the HT telecommunication company generated the highest turnover, of nearly HRK 1.6 million. Its price remained unchanged at HRK 191.5 per share.

A total of 39 stock traded today, with seven of them registering price increases, 19 recording price decreases and 13 remaining stable in price.

(€1 = HRK 7.567447)

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Friday, 16 April 2021

The Croatian National Bank (HNB) Reports HRK 266m Profit in 2020

ZAGREB, 16 April, 2021 - The Croatian National Bank (HNB) generated a profit of nearly HRK 266 million in 2020, achieving a positive result for the second consecutive year, but the profit was almost three and a half times lower than in 2019, according to the central bank's audited financial statement released on its webpage.

For the sake of comparison, the HNB had posted a profit of just over HRK 927 million for 2019.

Of last year's profit, HRK 53.2 million was paid into the bank's general reserves and HRK 212.8 into the state budget, in accordance with the Act on the Croatian National Bank.

The financial statement also shows that the HNB last year generated HRKK 591.7 million in net interest income, which is nearly HRK 88 million or 17.4% more than in 2019.

At the same time, net fee and commission income was HRK 34.4 million, or 11% higher, while operating income was HRK 703.3 million, or 48% lower compared with 2019.

The HNB's operating expenses in 2020 reached HRK 419.5 million, or 6% more. In 2020, the HNB had an average of 690 employees, which is 19 more than in 2019, and total employee costs were HRK 203 million.

(€1 = HRK 7.567447)

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Thursday, 15 April 2021

Zagreb Stock Exchange Indices Down For Second Day in a Row

ZAGREB, 15 April, 2021 - The main Zagreb Stock Exchange (ZSE) indices fell for the second day in a row on Thursday, with the Crobex decreasing by 0.22% to 1,882 points and the Crobex10 by 0.17% to 1,179 points.

Turnover at the close of the trading session was HRK 5.56 million, about a million less than on Wednesday. An additional HRK 4.68 million was generated by a block transaction with the stock of the Atlantic food and retail group at HRK 1,560 per share.

The only stock to pass the turnover mark of one million kuna was that of the Adris insurance and tourism group, turning over HRK 1.4 million. The price of its share rose by 0.45% to HRK 444.

A total of 43 stocks traded today, with 16 of them registering share price increases, 11 recording price decreases and 16 remaining stable in price.

(€1 = HRK 7.562610)

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