July 13 (SeeNews) - The Croatian central bank said on Wednesday it expects that the country's economy will expand by a real 5.5% this year, before growth slows down to 2.5% next year due to the unfavourable global context.
As a result of significantly higher global prices of energy resources and raw materials, the consumer price inflation this year is expected to speed up to 9.4% and to decline to 4.6% next year, the central bank said in a press release.
The surplus on current and capital account in 2022 is expected to decline slightly to 5.2% of GDP and to fall further to 3.8% of GDP next year.
Earlier this month, the central bank forecast an economic growth of over 5% this year and inflation close to 10%, local media reported.
Croatia's economic output grew by a real 10.2% in 2021, after a contraction of 8.4% in 2020.
The council of the central bank also took several decisions as part of the preparations to introduce the euro currency in Croatia as of January 1 next year, the press release said.
One of them is to reduce the rate for calculation of obligatory reserves as of August 10 to 5% from 9%, and to further cut it to 1% as of December 14, which is expected to reduce the obligatory reserves by 34.2 billion kuna ($4.6 billion/4.5 billion euro).
Another decision is to gradually cancel the maintenance of minimum required amount of foreign currency claims in two steps: as of August this year, the minimum percentage of maintenance of minimum required currency claims will be lowered to 8.5% from 17% and as of December it will be completely cancelled. This way, the bank will be able to dispose part of their foreign exchange assets worth some 5 billion euro.
These measures are aimed to provide further liquidity to banks in a move to help them not to increase interest rates, central bank governor Boris Vujcic told reporters on Wednesday, as seen in a video published on the website of state broadcaster HRT.
(1 euro=7.510 Croatian kuna)