Total liquid assets (M4) increased in May, reflecting the strong rise in net domestic assets and the unchanged level of net foreign assets. In the structure of M4, money (M1) increased and quasi-money decreased.

Total placements of monetary institutions to domestic sectors (except the central government) also grew in May, with household placements accounting for one half of the monthly increase. This was largely the result of the increase in housing loans attributable to the impact of the new round of the government's subsidy programme. In addition, the growth was recorded in placements to other financial institutions and corporates.

Total liquid assets (M4^[1]) grew by HRK 4.6bn (1.2%, based on transactions) in May on the month before, due to the strong rise in net domestic assets (NDA) of the monetary system and the unchanged level of net foreign assets (NFA), ending the month at HRK 374.9bn (Table 1). The strong growth in the NDA was mostly driven by the rise in net claims on the central government which resulted from a mild increase in claims on the government and stronger decrease in foreign currency government deposits with the CNB. Owing to the CNB's purchases of foreign currency from the government, the fall in foreign currency government deposits with the CNB did not contributed to the decrease in the NFA. As regards the components of M4, money (M1^[2]) went up considerably on a monthly basis (HRK 5.1bn or 3.0%), due mostly to the rise in corporate and household demand deposits. In contrast, quasi-money edged down (HRK 0.5bn or 0.2%), in large part due to the decline in foreign currency deposits of other financial institutions and corporates (Table 3). On an annual level, M1 grew by as much as 18.0% and M4 rose by 8.1% in May, which is almost equal to the rates recorded in the previous month (based on transactions, Figure 1).

Figure 1 Monetary aggregates annual rates of change based on transactions	Figure 2 Placements annual rates of change based on transactions
Source: CNB.

Total placements of monetary institutions to domestic sectors (except the central government) increased by HRK 1.4bn or 0.6% (based on transactions) in May on the previous month, ending the month at HRK 240.3bn. The annual growth rate of total placements accelerated from 2.6% in April to 3.4% in May (Figure 2). The overall monthly increase in placements was accounted for by loans which stood at HRK 234.5bn at the end of the month. Broken down by sector, household loans grew the most (HRK 0.7bn or 0.5%) due to the renewed increase in housing loans (HRK 0.5bn or 0.8%), attributable to the impact of the new round of the government's subsidy programme, while general-purpose cash loans showed a modest increase (HRK 0.1bn or 0.3%). On an annual level, the growth in housing loans accelerated from 9.3% in April to 9.7% in May, and the fall in general-purpose cash loans continued to decelerate (from −1.2% to −0.3%), with household loans picking up to 3.5% (from 3.1%). Moreover, loans to other financial institutions (HRK 0.4bn or 3.6%) and corporates (HRK 0.3bn or 0.3%) increased on a monthly basis (Table 2). Despite the modest monthly increase, loans to corporates accelerated on an annual basis, from 1.2% in April to 1.8% in May, given the fall in loans to this sector recorded in May 2020.

Table 1 Summary consolidated balance sheet of monetary institutions
in billion HRK and %

¹ The sum total of asset items 2.2 to 2.8 of Bulletin Table B1: Consolidated balance sheet of monetary financial institutions.
² The sum total of liability items 2 to 5 of Bulletin Table B1: Consolidated balance sheet of monetary financial institutions.
Source: CNB.

Table 2 Loans (except the central government) and main components
in billion HRK and %

¹ In addition to loans to households and corporates, they also include loans to the local government and other financial institutions.
² The transactions show changes that exclude the effects of exchange rate changes, securities price adjustments, reclassification and write-off of loans, including the sale of loans in the amount of their value adjustment.
Source: CNB.

Table 3 Deposits (except the central government) and main components
in billion HRK and %

¹ Includes only kuna sources of funds of credit institutions.
² The transactions show changes that exclude the effects of exchange rate changes, securities price adjustments, reclassification and write-off of loans, including the sale of loans in the amount of their value adjustment.
Source: CNB.

For detailed information on monetary statistics as at May 2021 see:

Central bank (CNB)
Other monetary financial institutions

1. Total liquid assets (M4) as defined by the CNB represent a broader definition of currency in circulation. ↑

2. Money (M1) as defined by the CNB represents a narrow definition of currency in circulation. ↑