information on economic trends (february 2017)
TRANSCRIPT
Information on economic trends
February 2017
3CNB • INFORMATION ON ECONOMIC TRENDS • FEBRUARY 2017
Summary
1 Themodelestimateofeconomicgrowthinthelastquarterof2016reflectsastagnationinrealGDPrelativetothepreviousquarterduetotheexceptionallyhighbaseinthethirdquarterwhengrowthwasgreatlysupportedbystrongexportsoftouristservices.
2 Theadjustedunemploymentrateintheperiod,whichusesthepreviouslymentionedCPIAdatainsteadofthedatafromtheJOPPDforminthecalculationoftheunemploymentrate,totalled13.3%(relativeto13.8%inthethirdquarter2016).
Favourable developments in economic activity continued at the end of 2016. Industrial production and exports of goods grew at a fast pace, retail trade turnover increased as well, while the fall in construction activity slowed down. The upward trend in the annual rate of change of consumer prices went on, entering positive territory in December. Monetary developments in 2016 were marked by more intensive lending to domestic sectors than in the previous few years. This was primarily aided by the continued recovery of corporate placements and, to a smaller extent, household placements, which increased for the first time after a seven-year deleveraging period. Data available for the second half of the year indicate that favourable fiscal developments continued during the period so the general government deficit at the annual level might come in much lower than at the same time last year. At the end of October, the general government deficit was much lower than at the end of 2015, primarily due to the favourable impact of the exchange rate.
Afteranoticeableintensificationofeconomicactivityinthethirdquarter,monthlyindicatorssignalledfavourabledevelop-mentsagaininthefourthquarterof2016.1Industrialproduc-tionthusspikedbyahigh6.4%attheendoflastyearrelativetotheaverageinthepreviousthreemonths(Figure3),nearingthelevelsfrombeforetheonsetoftheeconomiccrisis.Brokendownbymainindustrialgroupings,favourablemovementsinindustryareaconsequenceoftheincreaseinproductioninallMIGcom-ponents,withenergyproductionboastingthestrongestgrowth(Figure4).DatagroupedbyNCEAactivityrevealthatindustrialproductiongrewacrosstheboard.Therealretailtradeturnovercontinuedtoincreaseinthelastquarterof2016,growingbyasmuchas1.3%onthepreviousthreemonths(Figure7).Atthesametime,thevolumeindexofconstructionworkscontinuedtofall,althoughataslowerpace.Thiswassupportedbytheinten-sificationintheconstructionactivityofthegeneralgovernmentsector,asindicatedbythestrongriseincivilengineeringworksinNovember(Figures5and6).Asforexpectationsregardingfutureeconomicdevelopments,theresultsofbusinessandcon-sumerconfidencesurveysfromtheendof2016andthebegin-ningofthisyearsuggestacontinuationoffavourabletrendsinbusinessandconsumeroptimism.Consumerexpectationsclear-lyshowanincreaseinconfidence(Figure8).Employmentgrowthacceleratedagaininthefourthquarter
of2016.Thenumberofemployedpersonsincreasedby0.5%fromthepreviousquarter,withemploymentgrowingacrosstheboard.Forthemostpart,however,thisgrowthreflectedthein-creaseinthenumberofpersonsemployedinserviceactivitiesintheprivatesector,althoughthecontributionofindustrywasalsonoticeable(Figure14).Unemploymentcontinued todecreaseduringthesameperiodaswellbutataweaker intensity thanin the firsthalfof2016.Thereduction in thenumberofun-employedpersonswasprimarilyaresultofclearingsfromtherecordsforreasonsotherthanemployment.Theregisteredun-employmentrate,totalling14.1%inthefourthquarterof2016(14.5%inthethirdquarter),continueddecreasinginlinewiththereductionofthenumberoftheunemployed.2ThelatestdatafromtheLabourForceSurveyforthethirdquarter2016alsoconfirmed favourable developments in unemployment so theILOunemploymentrateintheperiodfromJulytoSeptembertotalled11.8%,asagainstthe13.3%inthesecondquarter(Fig-ure15).Asforsalaries,theygrewstronglyattheendoftheyearafteraslightdecreaseinthethirdquarter(Figure16).Atthesametime,realnetsalarieswentdownslightlyduetotheaccel-eratedgrowthofprices.
Attheendof2016,theconsumerpriceinflationenteredpos-itiveterritory,totalling0.2%(Table1).AllmajorCPIcompo-nents(exceptindustrialproducts),butinparticularthepricesoffood(includingalcoholandtobacco)andenergy,contributedtothisinflationgrowth.Theannualcontributionofthepricesoffoodtooverallinflationroseto0.4percentagepointsinDe-cember,whilethenegativecontributionofenergypriceswentdownto–0.2percentagepoints(Figure18).Theincreaseinthepricesofpetroleumproducts inDecember2016reflectedde-velopmentsincrudeoilpricesontheglobalmarket(Figure19).TheaveragepriceofBrentcrudeoilontheglobalmarket in-creasedinDecemberbysome16%fromNovemberduetoex-pectationsthatOPECmembersandotheroil-producingcoun-trieswouldadheretothereducedproductionquotasagreedattheendofNovember2016.TheannualgrowthrateofindustrialproducerpricesdeceleratedduetothestrongseasonalfallinthepricesofclothingandfootwearrelativetoDecember2015.CoreinflationacceleratedslightlyinDecember(to0.5%from0.4%inNovember),primarilyduetotheincreaseintheannualrateofchangeinthepriceofprocessedfoodproducts.Thiswaspre-dominantlyaresultoftheriseinthepricesoftobaccospurredbyhigherexciseduties.Foreign trade figures registered a considerable deficit de-
crease inOctoberandNovemberasaresultof thenoticeablegrowthinexportspairedwithslightlyweakergrowthinimportsthan in the previous quarter average.Total exports, after thenegativeresultsinthepreviousquarter,increasedbyasmuchas11.5%(Figure10),predominantlyduetothegrowthintheex-portsofoilandrefinedpetroleumproducts,whiletheexportsofothertransportequipment(mostlyships)declined.Agrowthintheexportsofthenarrowaggregate(6.7%)wasobservedacrosstheboard.Thiswastrueespeciallyformedicalandpharmaceu-ticalproducts,capitalequipment,electricity,roadvehiclesandindividualfoodproducts.Atthesametime,afterstagnatinginthepreviousquarter,totalimportsofgoodsincreasedby3.4%inOctoberandNovember(Figure11), to thegreatestextentasaconsequenceof therise in the importsofoilandrefinedpetroleumproducts,whilethegrowthinthenarrowaggregate(1.0%)wasspurredbystronger importsofcapitalequipmentandclothing.Theexchangerateofthekunaagainsttheeuromostlyappre-
ciatedinJanuary,endingthemonthatEUR/HRK7.48,down1.0%fromtheendofDecember2016(Figure21).Thekunaweakenedagainstmostothermajortradingpartners’currenciesinJanuary,resultinginanappreciationofthenominaleffective
4 CNB • INFORMATION ON ECONOMIC TRENDS • FEBRUARY 2017
exchange rate of 1.3% compared to the end of the previousmonth.Inadditiontothestrengtheningofthekunaagainsttheeuro, thiswasaidedby theappreciationof thedomesticcur-rencyagainst theyuanrenminbi, theTurkish liraand theUSdollar,whichwasprimarilyaresultofthestrengtheningoftheeuroagainstthementionedcurrenciesintheglobalforeignex-changemarket.At the beginning of 2017, euro benchmark interest rates
were still very low due to the ECB’s expansionarymonetarypolicy.Theovernight interest rate for theeuroarea,EONIA,thusdecreasedslightlyinJanuaryto–0.35%andthesix-monthEURIBORdeclinedto–0.24%(Figure24).TheriskpremiumsforEuropeanemergingmarkets,includingCroatia,continuedtodecreasegraduallyearlyin2017aftertheirtemporaryspikeinNovember2016(Figures24and25).However,Croatia’sriskpremiumremainedthehighestamongitsCEEpeersattheendofJanuary2017.Earlyin2017,thedomesticmoneymarketwasunderthein-
fluenceofstrongliquidityboostedbytheCNB’sexpansionarymonetarypolicy.AftertheCNBcreatedalargeamountofre-servemoneybypurchasingforeigncurrencyfrombanks,theav-eragesurplusliquidityinJanuarygrewtoarecordHRK16.4bnfromHRK9.2bninDecember2016(Figure50).Thiscontrib-utedtoafurtherdeclineintheaverageweightedinterestrateonovernightinterbankloans,whichfellto0.13%(Figure50).Theinterestrateonone-yearkunaT-billswithoutacurrencyclausealsodecreasedinJanuarytoitsall-timelowof0.62%.Interest rateson loansdeclined throughout2016,onboth
corporateloansandhousingloans(Figures28and29).Interestratesoncorporateinvestmentloansindexedtoaforeigncurren-cyfellbymorethanonepercentagepoint,totalling3.5%attheendofDecember(Figure31).Asforhousingloans,therewasanoticeabledeclineininterestratesonhousingloansgrantedforthefirsttimethroughout2016,althoughtheendoftheyearsawaslightincreaseininterestratesonkunahousingloans.Depositratesalsocontinuedtheiryears-longdownwardtrendin2016.Thisisprimarilytrueofinterestratesonnewtimedepositsofhouseholds(Figure34)whichtotalled0.81%inDecember2016andalmosthalvedfromthelevelsseenayearearlier.Thespreadbetweeninterestratesontotalnewloansanddepositsnarrowedslightlyin2016.However,itstillexceededsixpercentagepoints,whilethegapbetweeninterestratespreadsonloansanddepos-itsremainedslightlybelowfivepercentagepoints(Figure37).Monetarydevelopments in2016weremarkedbya strong
growth in net foreign assets (NFA) of the monetary systemandthestagnation innetdomesticassets(NDA)(Figure38)whichresulted intherise intotal liquidassets(M4)of4.7%,or5.3%iftheeffectofexchangeratechangesisexcluded(Fig-ure46).WithinthestructureofM4,thegreatestcontributiontogrowthcamefromtheincreaseinmoney(M1),whosegrowthratereachedasmuchas18.1%attheendof2016(Figure45),spurredparticularlybythegrowthofdemanddeposits.In2016,movements in totalplacementsweremuchmore
favourable thanover thepast fewyears (Figure40).The in-crease in total placements of 1.1% (based on transactions)wassupportedbycontinuedrecoveryinplacementstocorpo-rates(3.1%)andtoasmallerextentbyplacements tohouse-holdswhich,forthefirsttimeinsevenyears,increasedby0.5%(Figures41and42).Ontheotherhand,thenominalvalueofplacementswas3.4%lowerattheendof2016thanattheend
of2015,reflectingapartialwrite-offofloanstohouseholdsin-dexedtotheSwissfranc(HRK6.0bnintheperiodfromNo-vember 2015 to December 2016) and the sale by banks oftheirnon-performingplacements(HRK4.2bninthefirstninemonthsof2016).Asforlendingtothegovernment,bankplace-mentstothecentralgovernmentincreasedby3.0%in2016onanannuallevel(basedontransactions).Gross internationalreservesrosebyEUR1.1bn(8.0%) in
January2017on theendof thepreviousyear, reachingEUR14.6bn(Figure52).Thenoticeable increase ingrossreserveswas predominantly a result of a higher level of agreed repotransactions.Netusablereserveswentuponlyslightly(0.1%),standingatEUR12.2bnattheendofJanuary.NetexternaldebtofdomesticsectorsrosebyEUR0.6bnin
OctoberandNovember(Figure56).TheCNB’scontributiontothisgrowthtotalledEUR0.3bnduetothenarrowingofreservescausedbythecentralgovernmentwithdrawingfundsfromtheforeigncurrencydepositwiththeCNB.Afterintensivedelever-agingoverthesummer,netexternaldebtofcreditinstitutionsincreasedbyEUR0.2bn.Fiscaldataforthethirdquarterof2016undertheESA2010
methodologyreflectacontinuationofthestrongfiscalconsoli-dationfromthefirsthalfofthepreviousyear.Totalgeneralgov-ernmentrevenuesthusincreasedby5.3%intheperiodfromJulytoSeptemberrelativetothesameperiodayearearlier,whileatthesametimeexpendituresincreasedby1%.Brokendownbycategory,ontherevenuesideVATmadeastrongpositivecontri-bution(spurredbyfavourabledevelopmentsintourism),whileontheexpenditureside,theexpectedgrowthinexpensesonem-ployeeswaspairedwithahighincreaseinsubsidies,relativetothesameperiodayearearlier,whichwaspartlyduetoachangeinthepaymentdynamicsacrosstheyear.TheavailableMinistryofFinancedataonacashbasis(GFS
2001methodology)forOctoberindicatethatfiscaladjustmentcontinuedatthebeginningofthelastquarterof2016.Thus,ac-cordingtodataonacashbasisforOctober,revenuesincreasedandexpendituresdecreasedfromthesameperiodayearearlier.Duetounexpectedlygoodresults,amendmentstothestate
budgetandfinancialplansofextrabudgetaryuserswereadopt-edinNovember,andasaresulttheexpecteddeficitofthegen-eralgovernmentbudgetwasmuchreduced.Theimprovementinfiscal indicatorsisalsoreflectedinthereactionsoftwoin-ternational ratingagencies,whichupgraded theiroutlook forCroatia’screditratingfromnegativetostableinDecemberandJanuaryrespectively.TheconsolidatedgeneralgovernmentdebtinOctober2016
waslowerthanattheendof2015(duetofavourablefiscalde-velopmentsbutalsoduetotheappreciationofthekunaagainsttheeuro),thusdecliningtoHRK287.4bn(Figure59).Asforthepublicdebtstructure,2016sawsomepositivechangesintheformofextendeddebtmaturityandthegrowthintheshareofkunadebtinstruments.Inaddition,thegovernmentcontinuedtorefinanceitsliabilitiesatfavourableconditionsthroughoutthesecondhalfoftheyear,maintaininghighliquidity.AfterinterestratesreachedtheirhistoricallowatthelatestkunabondissueinJuly2016,interestratesonT-billsissuedinthethirdandthefourthquartermostlyremainedatexceptionallylowlevelsandremainedatsimilarlevelswhenT-billswereissuedatthebegin-ningof2017.
5CNB • INFORMATION ON ECONOMIC TRENDS • FEBRUARY 2017
94
97
100
103
106
–4
–2
0
2
4
Figure 1 Quarterly gross domestic productseasonally adjusted real values
%
2010
= 1
00
Quarterly rate of change of GDP – leftLevel of GDP – right
Note: Data for the fourth quarter of 2016 is the estimate derived using the CNB’s Monthly indicator of real economic activity, on the basis of data published until 2 February 2017.Sources: CBS data seasonally adjusted by the CNB and CNB calculations.
2010 20162011 2012 2013 2014 201570
80
90
100
110
120
130
Figure 4 Industrial production by main industrial groupingsseasonally adjusted indices
Note: Quarterly data are calculated as the average of monthly data. Source: CBS data seasonally adjusted by the CNB.
Intermediate goodsCapital goods
Non-durable consumer goodsDurable consumer goods
2010
= 1
00
Energy
2010 20162011 2012 2013 2014 2015
–6
–4
–2
8
6
–6
–4
–2
8
6
%
0
2
4
0
2
4
Figure 2 GDP rate of changecontribution by components
perc
enta
ge p
oint
s
Imports of goods and services – left Gross fixed capital formation – leftExports of goods and services – left Government consumption – leftChanges in inventories – left Household consumption – leftGross domestic product – right
Note: The projection for 2016 refers to the official projection of the CNB from December 2016.Source: CBS.
2011 2012 2013 2014 20152010 2016
%
88
92
96
100
104
112
–9
–6
–3
0
3
9
6 108
Figure 3 Industrial production
Source: CBS data seasonally adjusted by the CNB.
2010
= 1
00
Quarterly rate of change of seasonally adjusted index – leftTrend-cycle – right
2011 20162010 2012 2013 2014 2015
%
55
70
85
100
115
130
–9
–6
–3
0
3
6
Figure 5 Total volume of construction works
Note: Data for the fourth quarter of 2016 refers to October and November.Source: CBS data seasonally adjusted by the CNB.
Trend-cycle – rightQuarterly rate of change of seasonally adjusted index – left
2010
= 1
00
2010 20162011 2012 2013 2014 2015
–12
12 %
–8
–4
0
4
8
55
70
85
100
115
130
145
Figure 6 Buildings and civil engineering works
Source: CBS data seasonally adjusted by the CNB.
2010
= 1
00
Buildings (trend-cycle) – leftCivil engineering works (trend-cycle) – left
Buildings (quarterly rate of change) – rightCivil engineering works (quarterly rate of change) – right
2010 2011 2012 2013 2014 20162015
6 CNB • INFORMATION ON ECONOMIC TRENDS • FEBRUARY 2017
92
106
104
–4
3
2
%
94
96
98
100
102
–3
–2
–1
0
1
Figure 7 Real retail trade turnover
Source: CBS data seasonally adjusted by the CNB.
Trend-cycle – rightQuarterly rate of change of seasonally adjusted index – left
2010
= 1
00
2010 2011 2012 2013 2014 20162015
80
90
100
110
120
130
Figure 8 Business confidence indicatorsstandardised and seasonally adjusted values, three-member moving averages
Construction business confidence indicatorRetail trade business confidence indicator
Industry business confidence indicatorLong-run average = 100
Sources: Ipsos and CNB data seasonally adjusted by the CNB.
Services business confidence indicator CCI consumer confidence index
2010 2011 2012 201720152013 2014 2016
60
120
–30
–20
–10
0
10
75
90
105
Figure 9 EU confidence indicesseasonally adjusted series
Source: Eurostat.
Industrial confidence index – leftConsumer confidence index – leftEconomic Sentiment Index (ESI) – right
long
-run
ave
rage
= 1
00
in %
, bal
ance
of r
espo
nses
2010 2011 2012 20172013 2014 2015 2016
–15
20
–10
–5
0
5
10
15
Note: Data for the fourth quarter of 2016 refer to October and November.Source: CBS data seasonally adjusted by the CNB.
Figure 10 Goods exports (f.o.b.)
billi
on E
UR
in %
, sea
sona
lly a
djus
ted
Total exports (quarterly rate of change) – rightExports excl. ships and oil (quarterly rate of change) – rightTotal exports (trend-cycle) – leftExports excl. ships and oil (trend-cycle) – left
0.4
1.1
2010 2011 2012 20152013 2014 2016
0.5
0.6
0.7
0.8
0.9
1.0
–8
12
–4
0
4
8
Note: Data for the fourth quarter of 2016 refer to October and November.Source: CBS data seasonally adjusted by the CNB.
Figure 11 Goods imports (c.i.f.)bi
llion
EUR
in %
, sea
sona
lly a
djus
ted
Total imports (quarterly rate of change) – rightImports excl. ships and oil (quarterly rate of change) – rightTotal imports (trend-cycle) – leftImports excl. ships and oil (trend-cycle) – left
0.8
1.8
2010 2011 2012 2013 2014 2015 2016
1.0
1.2
1.4
1.6
–30
–20
–10
0
10
20
30
Note: Imports of capital equipment (SITC divisions 71 – 77). Data for the fourth quarter of 2016 refer to October and November.Source: CBS data seasonally adjusted by the CNB.
Figure 12 Imports of capital equipment and roadvehicles (c.i.f.)
billi
on E
UR
in %
, sea
sona
lly a
djus
ted
Imports of road vehicles (quarterly rate of change) – rightImports of capital equipment (quarterly rate of change) – rightImports of road vehicles (trend-cycle) – leftImports of capital equipment (trend-cycle) – left
0.00
0.06
0.12
0.18
0.24
0.30
0.36
2010 2011 2012 20152013 2014 2016
7CNB • INFORMATION ON ECONOMIC TRENDS • FEBRUARY 2017
Figure 13 Trade in goods balancethree-member moving averages of monthly data
Source: CBS.
billi
on E
UR
Energy sources Capital goods ShipsRoad vehicles Other Total
–0.9
0.3
2010 2011 2012 2013 2014 2015 2016
–0.6
–0.3
0.0
1320
1350
1380
1410
1440
1470
1500
1530
1560
Sources: CPIA data seasonally adjusted by the CNB.
perc
enta
ge p
oint
s
Figure 14 Employment by NCA activities seasonally adjusted data, contributions to the quarterly rate of change
in th
ousa
nd
2010 2011 2012 20162013 2014 2015
Public sector (O, P, Q) Other Industry (B, C, D, E)Construction (F) Trade (G) Employment – right
–2.4
–2.0
–1.6
–1.2
–0.8
–0.4
0.0
0.4
0.8
%
–1.0
–0.5
0.0
0.5
1.0
1.5
–1.0
–0.5
0.0
0.5
1.0
1.5
2010 2011 2012 2013 2014 2015 2016
perc
enta
ge p
oint
s
Industry (B, C, D, E) Construction (F) Trade (G)Public sector (O, P, Q) Other Nominal gross wage – right
Figure 16 Average nominal gross wage by NCA activitiesseasonally adjusted data, contributions to the quarterly rate of change
Note: Data on the average nominal gross wage by activity refer to data from the RAD-1 form, and from January 2016 to data from the JOPPD form. Data for the fourth quarter of 2016 refer to October and November. Sources: CBS and CNB calculations (seasonally adjusted by the CNB).
8
10
12
14
16
18
20
22%
2010 2011 2012 2013 2014 2015 2016
Registered unemployment rate Adjusted unemployment rateILO unemployment rate
Figure 15 Unemployment ratesseasonally adjusted data
Note: Since January 2015, the calculation of the registered unemployed rate has been made using the data on employed persons from the JOPPD form. The adjusted unemployment rate is the CNB estimate and is calculated as the share of the number of registered unemployed persons in the working age population (unemployed persons and persons insured with the CPIA). Data on the registered unemployed rate in the fourth quarter of 2016 refer to October and November.Sources: CBS and CNB calculations (seasonally adjusted by the CNB).
–2
–1
0
1
2
3
4
5
6
Figure 18 Year-on-year inflation rates and components’ contribution to consumer price inflation
a Core inflation does not include agricultural product prices and administrative prices.Sources: CBS and CNB calculations.
perc
enta
ge p
oint
s
Energy Unprocessed foodProcessed food Non-food industrial goods without energyServices Core inflation (%)a
Consumer price index (%)
2010 2011 2012 201620142013 2015
%
–8
–4
0
4
8
12
16
Figure 17 Consumer price index and core inflationannualised month-on-month rate of changea
a The month-on-month rate of change is calculated based on the quarterly moving average of seasonally adjusted consumer price indices.Sources: CBS and CNB calculations.
Consumer price index Core inflation
2010 2011 2012 201620142013 2015
8 CNB • INFORMATION ON ECONOMIC TRENDS • FEBRUARY 2017
20
70
80
90
100
110
120
130
150
250
350
450
550
650
750
850
60
50
40
30
Figure 19 Crude oil prices (Brent)
Sources: Bloomberg and CNB calculations.
Brent (USD/barrel) – left Brent (HRK/barrel) – right
USD/
barr
el
HRK/
barr
el
2010 2011 2012 201620142013 2015
80
200
90
100
110
120
130
140
150
160
170
180
190
Figure 20 HWWI index (excl. energy)
Sources: HWWI and CNB calculations.
2015
= 1
00
HWWI index (USD) HWWI index (HRK)
2010 2011 2012 201620142013 2015
Figure 21 Daily nominal exchange rate – HRK vs. EUR, USD and CHFCNB midpoint exchange rate
Source: CNB.
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
EUR/HRK – left USD/HRK – right CHF/HRK – right
4.5
5.0
5.5
6.0
6.5
7.0
8.0
7.5
2010 2017201420122011 2013 2015 2016
140
90
100
110
120
130
Figure 22 Nominal and real effective exchange ratesof the kuna
Note: The real effective exchange rate of the kuna deflated by producer prices includes the Croatian index of industrial producer prices on the non-domestic market, which is available from January 2010. The unit labour cost is calculated as the ratio between compensation per employee and labour productivity (defined as GDP per person employed), while the real effective exchange rate of the kuna deflated by unit labour costs is the result of the interpolation of quarterly values. A fall in the index indicates an effective appreciation of the kuna.Source: CNB.
NominalReal (CPI)Real (PPI)
Real (ULC total economy)
inde
x, 2
010
= 1
00
Real (ULC manufacturing)
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2017
2014
2013
2015
2016
Figure 23 Contributionsa of individual currencies to the monthly rate of change of the average index of the nominal effective kuna exchange rate (INEER)
a Negative values indicate contributions to the appreciation of the INEER.Source: CNB.
perc
enta
ge p
oint
s
EUR USD CHF Other currencies INEER (%)
–2.0
–1.0
–0.5
0.0
0.5
1.0
1.5
2.0
–1.5
2010 2011 2012 201720142013 2015 2016
Table 1 Price indicatorsyear-on-year and month-on-month rates of change
Year-on-year rates
Month-on-month rates
11/16 12/16 12/15 12/16
Consumer price index and its components
Total index –0.2 0.2 –0.6 –0.2
Energy –2.9 –1.1 –0.6 1.2
Unprocessed food –0.1 1.7 –0.3 1.5
Processed food (incl. alcoholic drinks and tobacco)
0.5 1.0 –0.5 0.0
Non-food industrial goods without energy
0.9 0.2 –1.5 –2.2
Services –0.2 –0.1 0.1 0.2
Other price indicators
Core inflation 0.4 0.5 –0.7 –0.6
Index of industrial producer prices on the domestic market
–3.1 –0.1 –1.4 1.7
Brent crude oil price (USD) 4.5 43.3 –15.1 16.4
HWWI index (excl. energy)a 20.0 25.6 –2.3 2.2a The index is calculated on the basis of raw materials prices expressed in US dollars.Sources: CBS, Bloomberg and HWWI.
9CNB • INFORMATION ON ECONOMIC TRENDS • FEBRUARY 2017
%
–100
0
100
200
300
400
500
Figure 24 Interest rates on the euro and the average yield spread on bonds of European emerging market countries
Sources: ECB, Bloomberg and J. P. Morgan.ba
sis
poin
ts
ECB benchmark rate – left EONIA – left 6M EURIBOR – leftEMBI spreads for European emerging market countries – right
–0.5
0.0
0.5
1.0
1.5
2.0
2.5
2010 2011 2012 2013 2014 2015 20172016
0
100
200
300
400
500
600
700
800
Figure 25 CDS spreads for 5-year government bonds of selected countries
Note: Credit default swaps (CDS) spread is an annual premium that a CDS buyer pays for protection against credit risk associated with an issuer of an instrument.Source: S&P Capital IQ.
basi
s po
ints
CroatiaPoland
Czech R.BulgariaRomania Slovenia
HungarySlovak R.
ItalyGermany
2010 2011 2012 2013 2014 20172015 2016
0
100
200
300
400
500
600
700
Unicredit S.p.A. Société GénéraleErste Group Bank AGIntesa Sanpaolo S.p.A.
Raiffeisen Bank International AG
Figure 26 CDS spreads for selected parent banks of domestic banks
basi
s po
ints
Source: S&P Capital IQ.
2010 2011 2012 2013 2014 2015 2016 2017
%
0
1
2
3
4
5
6
Figure 27 Interest rates quoted on the interbank market (3 month ZIBOR) monthly averages of simply daily averages of bank quotations
Source: CNB.
2010 2011 2012 2013 2014 20172015 2016
%
0
2
4
6
8
10
12
14
Figure 28 Short-term financing costs in kuna without a currency clause
Sources: MoF and CNB.
364-day T-bills (HRK)Short-term kuna corporate loans without a currency clauseShort-term kuna household loans without a currency clause
2010 2011 2012 2013 2014 20172015 2016
%
0
2
4
6
8
10
12
14
Figure 29 Long-term financing costs in kuna with a currency clause and in foreign currency
Note: EMBI, or the Emerging Market Bond Index, shows the spread between yieldson government securities of emerging market economies, Croatia included, andrisk-free securities issued by developed countries.Sources: MoF, Bloomberg and CNB.
Long-term corporate loans with a currency clause546/547-day T-bills (EUR, indexed to f/c) 455-day T-bills (EUR, indexed to f/c)Long-term housing loans to households with a currency clauseYield on generic 10-year German bond + EMBI CroatiaLong-term household loans with a currency clause, excl. housing loans
2010 2011 2012 2013 2014 20172015 2016
10 CNB • INFORMATION ON ECONOMIC TRENDS • FEBRUARY 2017
0
2
4
6
8
2012 2013 2014 2015 2016
NIR
on n
ew lo
ans,
in %
Figure 30 Bank interest rates on loans to non-financialcorporations by volume
Source: CNB.
Interest rate spread between loans up to HRK 7.5m and loans over HRK 7.5m
Loans up to HRK 7.5m Loans over HRK 7.5m
3
5
7
9%
2015 2016
Figure 31 Interest rates on original new loans to non-financial corporations
Source: CNB.
Working capital loans in kunaWorking capital loans in kuna indexed to f/cInvestment loans in kuna indexed to f/c Revolving loans, overdrafts and credit card credit in kuna
%
2015 2016
Figure 32 Interest rates on original new housing loans to households
Source: CNB.
Housing loans in kuna Housing loans in f/cTotal housing loans
3.5
4.0
4.5
5.0
5.5
%
6
7
8
9
10
2015 2016
Consumer loans in kuna Consumer loans in f/cTotal consumer loans Other loans
Figure 33 Interest rates on original new consumer and other loans to households
Note: Consumer loans include total loans to households excl. housing and other loans. Other loans to households (denominated almost exclusively in kuna) include credit card loans, overdrafts, revolving loans and receivables on charge cards.Source: CNB.
2012 2013 2014 2015 2016
Figure 34 Interest rates on household time deposits
Source: CNB.
Short-term household time deposits in kuna
Long-term household time deposits in kunaShort-term household time deposits in f/c
Long-term household time deposits in f/cTotal household time deposits
0
1
2
3
4
5%
2012 2013 2014 2015 2016
Figure 35 Interest rates on corporate time deposits
Source: CNB.
Short-term corporate time deposits in kuna
Long-term corporate time deposits in kunaShort-term corporate time deposits in f/c
Long-term corporate time deposits in f/cTotal corporate time deposits
%
0
2
4
6
8
11CNB • INFORMATION ON ECONOMIC TRENDS • FEBRUARY 2017
%
0
2
4
6
8
10
2012 2013 2014 2015 2016
Figure 36 Average interest rates on loans (excl. revolving loans) and deposits
a For time deposits, interest rates on newly received deposits are weighted by their balances.Source: CNB.
Loans – balances Loans – newDeposits – balances Deposits – newa
%
3
5
7
9
2012 2013 2014 2015 2016
Figure 37 Spread between interest rates on loans (excl. revolving loans) and interest rates on deposits
a Non-indexed to f/c. b Indexed to f/c.Note: Spread between average interest rates on loans and average interest rates on deposits should be differentiated from net interest margin (the ratio of the difference between interest income and interest expenses to total assets of credit institutions).Source: CNB.
Loans in kunaa – Deposits in kunaa
Loans in kunab – Deposits in f/cTotal – newTotal – balances
–20
–10
010
20
30
Source: CNB.
Figure 38 Net foreign assets, net domestic assets and totalliquid assets (M4)absolute change in the last 12 months
billi
on H
RK
Net foreign assets Net domestic assets M4
2010 2011 2012 201620152013 2014
–30
–10
0
10
20
30
–20
Source: CNB.
Figure 39 Net domestic assets, structureabsolute change in the last 12 months
billi
on H
RK
Net placements to the government Placements
Other net assets Net domestic assets
2010 2011 2012 201620152013 2014
–3
2
3
1
–15
–10
0
5
–5
15
10
–1
0
%
–2
Figure 40 Placements bi
llion
HRK
Year-on-year rate of change (transaction-based) – right
Transactions in total placements – leftYear-on-year rate of change (balance-based) – right
Source: CNB.
2010 2011 2012 201620152013 2014
–2
–1
0
1
2 %
–16
–8
–4
0
4
8
12
16
–12
Figure 41 Placements to corporates
billi
on H
RK
Source: CNB.
2010 2011 2012 201620152013 2014
Year-on-year rate of change (transaction-based) – right
Transactions in corporate placements – leftYear-on-year rate of change (balance-based) – right
12 CNB • INFORMATION ON ECONOMIC TRENDS • FEBRUARY 2017
%
–10
10
–5
0
5
Figure 42 Placements to householdsbi
llion
HRK
Source: CNB.
2010 2011 2012 201620152013 2014
Year-on-year rate of change (transaction-based) – right
Transactions in household placements – leftYear-on-year rate of change (balance-based) – right
–1.0
1.0
–0.5
0.0
0.5
0
50
100
150
200
250
300
350
Figure 43 Structure of credit institution placements
Source: CNB.
billi
on H
RK
Placements to other sectorsPlacements to the central governmentPlacements to householdsPlacements to corporates
2010 2011 2012 2013 2014 2015 2016
%
–10
–5
0
5
10
15
20
25
40
0
10
20
30
40
50
60
70
100
80
90 35
30
Figure 44 Credit institution and MMF placements to thecentral government
Source: CNB.
billi
on H
RK
Year-on-year rate of change – rightPlacements to the central government (balance) – left
2010 2011 2012 201620152013 2014
%
–16
–8
–4
0
4
8
12
16
24
20
–12
35
40
45
50
55
60
65
70
75
80
85
Figure 45 Money (M1)
Source: CNB.
billi
on H
RK
Year-on-year rate of change – rightM1 (balance) – left
2010 2011 2012 201620152013 2014
%
–6
–3
0
3
6
9
12
15
21
18
220
310
230
240
250
260
270
280
290
300
Source: CNB.
Figure 46 Total liquid assets (M4)bi
llion
HRK
Year-on-year rate of change (balance-based) – rightYear-on-year rate of change (transaction-based) – rightM4 (balance) – left
2010 2011 2012 201620152013 2014
0
320
40
80
120
160
200
240
280
Figure 47 Structure of M4 monetary aggregate
Source: CNB.
billi
on H
RK
M1 Kuna deposits Foreign currency depositsBonds, money market instruments and MMFs shares/units
2010 2011 2012 2013 2014 2015 2016
13CNB • INFORMATION ON ECONOMIC TRENDS • FEBRUARY 2017
Table 2 Balance of paymentsa
preliminary data, in million EUR
2015Jan. –
Sep. 2015
Jan. – Sep. 2016
Indices
2015/ 2014
Jan. – Sep. 2016/
Jan. – Sep. 2015
Current account 2,236.2 2,695.1 1,923.1 246.8 71.4
Capital account 310.6 161.7 304.2 442.0 188.2
Financial account (excl. reserves)
1,161.3 1,339.5 2,244.6 116.7 167.6
International reserves
745.3 550.5 –694.6 – –
Net errors and omissions
–640.1 –966.8 –677.4 125.2 70.1
a In line with the 6th edition of the Balance of Payments and International Investment Position Manual (BPM6).Source: CNB.
%
20
30
35
40
25
–30
–15
0
15
30
Figure 48 Kuna savings and time deposits
Source: CNB.
billi
on H
RK
Year-on-year rate of change – rightKuna deposits (balance) – left
2010 2011 2012 201620152013 2014
%
–5
0
5
10
15
20
80
100
120
140
160
180
Source: CNB.
Figure 49 Foreign currency deposits
billi
on H
RK
Year-on-year rate of change (balance-based) – rightYear-on-year rate of change (transaction-based) – rightForeign currency deposits (balance) – left
2010 2011 2012 201620152013 2014
0
18%
3
6
9
12
15
Figure 50 Bank liquidity and overnight interbank interest rate
Note: Liquidity surplus is the difference between the balance in bank settlementaccounts with the CNB and the amount that banks are required to hold in theiraccounts after the calculation of reserve requirements.Source: CNB.
billi
on H
RK
Liquidity surplus (incl. overnight deposits with the CNB) – rightOvernight interbank interest rate – left
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2010 2011 20172015201420132012 2016
8
9
10
11
13
16
12
14
15
Figure 52 International reserves of the CNBat current rate of exchange
billi
on E
UR
a NUIR = international reserves – foreign liabilities – reserve requirements in f/c – foreign currency government deposits.Source: CNB.
International reserves Net usable international reservesa
2010 2011 2012 2013 201720152014 2016
Figure 51 Spot transactions in the foreign exchange market(net turnover)
billi
on E
UR
Bank transactions with legal persons Bank transactions with natural personsBank transactions with foreign banks Bank transactions with the CNB
CNB transactions with government and the ECTotal bank transactions
–2.5
–0.5
0.0
0.5
1.0
1.5
2.0
–1.0
–1.5
–2.0
Note: Positive values indicate net purchases and negative values indicate net sales.Legal persons include the government. Data for the first quarter of 2017 refers to January.Source: CNB.
2010 2011 2012 201720152013 2014 2016
14 CNB • INFORMATION ON ECONOMIC TRENDS • FEBRUARY 2017
–4
–2
0
8
4
2
–4
–2
0
2
4
8
66
Figure 53 Current and capital account flows
a Sum of the last four quarters.Source: CNB.
billi
on E
UR
as %
of G
DP
Secondary income – left Services – leftPrimary income – left Goods – left
2010 2011 2012 201620152013 2014
Current and capital accounta – rightCurrent and capital account excl. the effect of conversiona – right
Capital transactions – left
–8
–6
–4
–2
0
4
6
2
–3
–2
–1
0
1
2
4
3
Figure 54 Financial account flows by type of investment
Note: A positive value indicates net outflow of equity abroad (including on the basis of the growth in international reserves). Total net capital flow series are shown as a four-quarter moving average.Source: CNB.
billi
on E
UR
as %
of G
DP
Change in international reserves – leftOther investment – leftPortfolio investment – leftDirect investment – left
Total net flows – right
2010 2011 2012 201620152013 2014
Financial derivatives – left
–9
12
–3
–2
–1
0
1
2
4
3
–6
–3
0
3
6
9
Figure 55 Financial account flows by capital structure
Note: A positive value indicates net outflow of equity abroad (including on the basis of the growth in international reserves). Total net capital flow series are shown as a four-quarter moving average.Source: CNB.
billi
on E
UR
as %
of G
DP
2010 2011 2012 201620152013 2014
Change in international reserves – left Debt liabilities, net excl. the change in international reserves – leftEquity liabilities, net – left
Total net capital flows excl. the change in international reserves – rightTotal net capital flows – right
–2
0
1
2
3
–1
–4
–3
Figure 56 Net external debt transactions
billi
on E
UR
General government Croatian National Bank Other MFIsOther sectors Direct investment Total
Note: Transactions refer to the change in debt excl. cross-currency changes and other adjustments. Net external debt is calculated as gross external debt stock net of foreign debt claims. Data for the fourth quarter of 2016 refer to October and November.Source: CNB.
2010 2011 2012 201620152013 2014
–3
–2
0
1
2
–1
Figure 57 Gross external debt transactions
Note: Transactions refer to the change in debt excl. cross-currency changes andother adjustments. Data for the fourth quarter of 2016 refer to October and November.Source: CNB.
billi
on E
UR
General government Croatian National Bank Other MFIsOther sectors Direct investment Total
2010 2011 2012 201620152013 2014
0
10
20
30
40
50
Figure 58 Gross external debtend of period
Source: CNB.
billi
on E
UR
General government Croatian National Bank Other MFIsOther sectors Direct investment
2010 2011 2012 2013 2014 2015 2016
15CNB • INFORMATION ON ECONOMIC TRENDS • FEBRUARY 2017
Table 4 Consolidated central government net borrowingGFS 2001, in million HRK
Jan. – Oct. 2015
Jan. –Oct. 2016
1 Revenue 104,763 113,442
2 Disposal of non-financial assets 408 94
3 Expenditure 108,552 109,854
4 Acquisition of non-financial assets 3,520 3,221
5 Net borrowing (1 + 2 – 3 – 4) –6,902 461
Sources: MoF and CNB calculations.
Table 5 General government debtin million HRK
Jan. –Oct. 2015
Jan. –Oct. 2016
Change in total debt stock 4,011 –2,130
Change in domestic debt stock 4,471 7,432
– Securities other than shares, short-term –5,092 –1,105
– Securities other than shares, long-term 9,230 14,323
– Loans 333 –5,786
Change in external debt stock –460 –9,562
– Securities other than shares, short-term –577 –49
– Securities other than shares, long-term 3,461 –8,445
– Loans –3,344 –1,068
Memo item:
Change in total guarantees issued –794 1,647
Source: CNB.
Table 3 Consolidated general government balanceESA 2010, in million HRK
Jan. – Sep. 2015
Jan. – Sep. 2016
Total revenue 108,293 118,822
Direct taxes 13,745 15,624
Indirect taxes 49,588 53,223
Social contributions 29,642 30,430
Other 15,318 19,545
Total expenditure 116,876 118,872
Social benefits 40,772 41,116
Subsidies 4,437 5,425
Interest 8,921 8,701
Compensation of employees 28,247 29,072
Intermediate consumption 20,039 19,094
Investment 7,861 7,980
Other 6,600 7,483
Net lending (+)/borrowing (–) –8,583 –51
Sources: Eurostat and CBS.
0
20
40
60
80
100
0
10
20
30
40
50
60
70
80
90
100
5865
71
8287 87 84
2010 2011 2012 2013 2014 2015 10/2016
as %
of G
DP
shar
e in
gen
eral
gov
ernm
ent d
ebt,
in %
External general government debt – leftDomestic general government debt – left
General government debt – right SGP reference value (60%)
Figure 59 General government debt
Note: Nominal GDP for the last four available quarters was used for the calculation of the relative indicator.Source: CNB.
16 CNB • INFORMATION ON ECONOMIC TRENDS • FEBRUARY 2017
Abbreviations and symbols
Abbreviations
BIS –BankforInternationalSettlementsbn –billionb.p. –basispointsBOP –balanceofpaymentsc.i.f. –cost,insuranceandfreightCBRD –CroatianBankforReconstructionandDevelopmentCBS –CentralBureauofStatisticsCCI –consumerconfidenceindexCDCC –CentralDepositoryandClearingCompanyInc.CDS –creditdefaultswapCEE –CentralandEasternEuropeanCEFTA –CentralEuropeanFreeTradeAgreementCEI –consumerexpectationsindexCES –CroatianEmploymentServiceCM –CroatianMotorwaysCIHI –CroatianInstituteforHealthInsuranceCLVPS –CroatianLargeValuePaymentSystemCNB –CroatianNationalBankCPF –CroatianPrivatisationFundCPI –consumerpriceindexCPIA –CroatianPensionInsuranceAdministrationCR –CroatianRoadsCSI –consumersentimentindexDAB –StateAgencyforDepositInsuranceandBankReso-
lutiondep. –depositDVP –deliveryversuspaymentEC –EuropeanCommissionECB –EuropeanCentralBankEFTA –EuropeanFreeTradeAssociationEMU –EconomicandMonetaryUnionESI –economicsentimentindexEU –EuropeanUnionexcl. –excludingf/c –foreigncurrencyFDI –foreigndirectinvestmentFed –FederalReserveSystemFINA –FinancialAgencyFISIM –financialintermediationservicesindirectlymeasuredf.o.b. –freeonboardGDP –grossdomesticproductGVA –grossvalueaddedHANFA –CroatianFinancialServicesSupervisoryAgencyHICP –harmonisedindexofconsumerpricesILO –InternationalLabourOrganizationIMF –InternationalMonetaryFundincl. –includingIPO –initialpublicofferingm –millionMIGs –mainindustrialgroupingsMM –monthlymaturityMoF –MinistryofFinanceNCA –NationalClassificationofActivitiesNCB –nationalcentralbankNCS –NationalClearingSystem
n.e.c. –notelsewhereclassifiedOECD –OrganisationforEconomicCo-OperationandDe-
velopmentOG –OfficialGazetteR –Republico/w –ofwhichPPI –producerpriceindexRTGS –Real-TimeGrossSettlementQ –quarterlyRR –reserverequirementSDR –specialdrawingrightsSITC –StandardInternationalTradeClassificationSGP –StabilityandGrowthPactVAT –valueaddedtaxWTO –WorldTradeOrganizationZMM –ZagrebMoneyMarketZSE –ZagrebStockExchange
Three-letter currency codes
ATS –AustrianschillingCHF –SwissfrancCNY –YuanRenminbiDEM –GermanmarkEUR –euroFRF –FrenchfrancGBP –poundsterlingHRK –CroatiankunaITL –ItalianliraJPY –JapaneseyenUSD –USdollar
Two-letter country codes
BG –BulgariaCZ –CzechR.EE –EstoniaHR –CroatiaHU –HungaryLV –LatviaLT –LithuaniaPL –PolandRO –RomaniaSK –SlovakR.SI –Slovenia
Symbols
– –noentry.... –datanotavailable0 –valueislessthan0.5oftheunitofmeasurebeing
used∅ –averagea,b,c,... –indicatesanotebeneaththetableandfigure* –correcteddata() –incompleteorinsufficientlyverifieddata