HNB: Stricter financing conditions not yet spilling over to interest rates

NEWS 08.06.202221:42 0 komentara
N1, Ilustracija

In April, inflation increased to 9.4 percent, mainly due to higher energy and food prices, while stricter financing conditions have not spilled over to loan interest rates for now, the Croatian Central Bank (HNB) said on Wednesday after a session of its Council.

The HNB Council discussed economic and financial trends and financial stability, and adopted the annual 2021 report.

The growth of real GDP increased significantly in Q1, and statistics for the start of Q2 point to a marginally weaker growth than at the start of the year, the HNB said, adding that employment and nominal pay growth have also slowed down.

The inflation of consumer prices increased from 7.3% in March to 9.4% in April, mainly due to higher energy and food prices, and higher prices are visible in more and more products and services.

The short and long-term government financing costs continued to mildly increase in May, in line with trends on global financial markets.

For now, stricter financing conditions have not spilled over to household and corporate loan interest rates, which mildly decreased in April.

Lending to domestic sectors, except the central government, continue to accelerate year on year from 5% in March to 6.5% in April, mainly thanks to a strong increase in lending to non-financial companies.

The increase in loan demand is likely tied to higher import costs for energy and raw materials and companies’ attempts to pre-empt the expected rise in borrowing costs by borrowing in the existing favourable conditions.

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