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At end-September, total credits amounted to HRK 252.2bn, which is 7.7% higher than a year earlier, largely due to 2.6% depretiation of the local currency. Still, this is record-low rate of credit expansion since November 2000.

At monthly level, total loans fell the second month, this time by HRK 1.6bn. Personal loans went down the eighth month and at end-September amounted to HRK 122.7bn.

At annual level, personal loans recorded the lowest growth rate ever of 0.8% due to lower demand for personal loans and banks' crediting of the public sector.

Mortgage loans, comprising for 42.69% of personal loans, recorded an annual growth of 7.1%. Simultaneously, corporate loans went up 4.1% in a year to HRK 96.7bn, this being the lowest annual growth rate since May 2004.

The public sector is to blame for such credit expansion as the value of loans allocated to the state surged 63.9% from a year earlier and at end-September totaled HRK 30.1bn.

By year-end, RBA analysts expect a further contraction in public crediting with the successful placement of bonds. Also, unfavorable trends on labour market and lower personal income will both serve as negative influences on personal crediting.