The CNB Council today examined economic and monetary developments in the previous period together with a financial system stability report, and adopted several decisions on matters falling within its field of responsibility.

Monthly statistical indicators show a small increase in economic activity at the beginning of 2018, which followed a temporary stagnation late in 2017. Favourable labour market developments continued in the same period. The annual consumer price inflation rate accelerated to 1.1% in March, driven primarily by the prices of unprocessed food products. Foreign trade in goods recorded adverse trends in January 2018: exports decreased and import growth accelerated from the previous quarter average. The CNB maintained its expansionary monetary stance, keeping domestic financial system liquidity at very high levels in April. Bank lending to the corporate and household sectors continued to climb in March and average interest rates on new loans edged down. The net external debt of domestic sectors decreased slightly in the first two months of 2018. The Excessive Deficit Procedure Report shows a general government surplus (under ESA methodology) of HRK 2.8bn (0.8% of GDP) in 2017, confirming the continuation of strong fiscal consolidation started in 2015. Available data indicate that the first quarter central government deficit slightly exceeded that in the first quarter of 2017, while public debt shrank at the end of January from the previous month.

Financial stability was favourably affected by continuing economic growth and positive global trends so that total system exposure to systemic risks remained moderate.

The CNB Council also approved a number of decisions on appointments made by several credit institutions' supervisory boards: Gordan Miler is appointed as Chairman of the Management Board of Imex banka d.d., Split, Zvonimir Akrap and Bruno Biuk are appointed as Members of the Management Board of Splitska Banka, d.d., Split, while Antonija Matošin is reappointed as Chairwoman and Darija Hejni as Member of the Management Board of Prva stambena štedionica d.d., Zagreb.