At the session held on Wednesday, 15 October 2003, the Council of the Croatian National Bank chaired by Governor Željko Rohatinski, Ph.D., discussed the recent economic and monetary developments, adopted the monetary policy projection for the fourth quarter of 2003 and the international reserves management report for the first semester of this year, and enacted several decisions within its competence.

The data available indicate a moderate acceleration of the economic growth. In the fist quarter of 2003, GDP increased by 4.9% compared to the same period of the previous year, while the second quarter of 2003 saw a 5.0% GDP growth. The fundamental characteristic of the economic developments in the first half of the year is a strong investment activity and strengthening of the international trade in goods and services.

Inflation has remained low: the annual rate of retail price inflation stood at 1.6%, and the rate of core inflation at 0.9%.

During the third quarter, the exchange rate of the kuna against the euro was stable. Accordingly, as in the previous quarter, there was no need for the central bank intervention in the foreign exchange market.

In the second quarter and at the beginning of the third quarter, a growth in banks' placements to non-banking sector continued to decelerate. In the first nine months of 2003, placements increased by 9.9%, which is almost twice as slow as the growth recorded in the same period of the previous year (21.6%).

The CNB Council endorsed the proposals of the supervisory boards of several banks for the appointment of chairman and members of their management boards. Časlav Stošić was thus appointed chairman and Sandra Brkić member of management board of Križevačka banka d.d Križevci, Marijan Trusk chariman and Marijan Kantolić member of management board of Samoborska banka d.d. Samobor. Marijan Štefanac was granted an approval to become member of management board of Požeška banka d.d. Požega, and Alois Steinbichler to become member of management board of Zagrebačka banka d.d. Zagreb.

At this session, Centar banka d.d was granted an authorization to provide banking and other financial services. The CNB Council also granted an approval to Volksbank International AG, Vienna for the acquisition of more than 75% of shares in Volksbank d.d. Zagreb, and Samoborska banka d.d. Samobor was granted an approval for a merger of Zagorska banka d.d. Krapina with Samoborska banka d.d. Samobor.