General-purpose cash loans continue to rise at two-digit rates, according to Croatian National Bank (HNB) data, which Raiffeisenbank Austria (RBA) analysts consider a result of positive trends on the labour market and favourable financing conditions.

According to HNB data, general-purpose cash loans account for 39.3% of household loans and rose 11.8% on the year to HRK 50.7 billion at the end of May 2019.

Such trends are the result of salary and employment growth, low financing costs and rising consumer optimism, RBA says.

It expects similar trends in the months ahead, albeit at a slower pace in the wake of the HNB’s recommendation to banks concerning the approval of non-housing consumer loans.

The HNB recommended to credit institutions at the end of February to impose stricter conditions on general-purpose cash loans, and called on consumers to be prudent in borrowing.

According to HNB data, household loans totalled HRK 128.9 billion at the end of May 2019, up 0.9% on the month.

Annual growth rates have been recorded without interruption since September 2017, indicating a recovery of retail lending.

Housing loans account for a majority of retail lending (42.5%), totalling HRK 54.8 billion at the end of May 2019.

(EUR 1 = HRK 7.4)