Croatian National Bank - Annual Report 2006

The Croatian National Bank continued its focus on reducing the external debt to GDP ratio last year.

Despite the central bank's efforts, the ratio worsened in 2006 after a surge in bank lending growth led to a sharp rise in the current-account deficit.

The surge in lending took place in spite of the introduction of prudential regulation aimed at reducing lending. The central bank introduced another measure which meant banks whose credit growth rate in 2007 exceeded 12%, the rate estimated to

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