Neither cold nor hot. But just right. Like Goldilocks’ porridge, which required the right temperature, central banks have recently been expected to temper interest rates just enough to lower inflation to the desired two percent, but without cooling the porridge too much and causing a recession. The possibility of achieving this not at all simple task, which has been colloquially termed a soft landing, has been provoking debates among economists for a year and a half and very different forecasts about the possibility of realizing Goldilocks’ scenario. How successfully entrepreneurs adapted to inflation in 2021 and 2022 can be read from the business results for those two years. The consolidated net profit in those years was 43.1, or almost 50 percent higher compared to the pre-pandemic year. On the other hand, in the crisis year of 2020, total profit, reduced by total loss, was about 30 percent lower compared to the previous year. In this week’s topic, Antonija Knežević writes how inflation is better for entrepreneurs than recession.
Domestic banks achieved a profit of almost 704 million euros, which is about 50 percent more than in the same period last year. In the first six months, according to the HNB, they had a total of 1.202 billion euros in interest income and 205.5 million euros in interest expenses. Therefore, the total net income of banks from interest was 996.5 million euros. Interest margins, as well as income that banks earn from overnight deposits, have so significantly influenced the growth of the financial sector that it was the most responsible for growth in the last quarter in the structure of GDP. Despite such fantastic indicators, the government has very shyly responded to media questions about the possible introduction of an additional tax. Why the state is reluctant to additionally tax banks was discovered by Ksenija Puškarić.
