Loans to non-financial enterprises increased in April by as much as 1.9 billion kuna, marking the continuation of strong loan growth for the third consecutive month, according to a statement from the Croatian National Bank (HNB).
Total placements of monetary institutions to domestic sectors, excluding the central government, rose during April by 2.7 billion kuna, or by 1.1 percent based on transactions compared to March, and at the end of the month amounted to 254.5 billion kuna, as stated in HNB’s Commentary on Monetary Movements for April this year.
The HNB believes that the demand for loans from enterprises has likely increased due to the pronounced rise in the prices of imported energy and raw materials, which has increased their procurement costs, as well as the efforts of enterprises to borrow under favorable conditions and thus preempt the expected rise in borrowing costs.
Namely, the tension and heightened uncertainty in the markets caused by Russia’s aggression against Ukraine are primarily reflected in stronger inflationary pressures, especially in the energy and raw materials segments, thereby increasing the risks of a faster and stronger change in the direction of monetary policy and rising market interest rates.
