Ante Žigman: ECB rate hikes to help reduce inflation in Croatia

Croatian National Bank Governor Ante Žigman stated that the European Central Bank’s (ECB) decision to implement a more restrictive monetary policy will help reduce inflationary pressures in Croatia. Following its 601st meeting, the ECB Governing Council raised key interest rates by 0.25 percentage points for the second time this year, bringing the deposit facility rate to 2.50 percent.

Žigman, who is also a member of the ECB Governing Council, noted that the policy tightening is a response to rising energy prices and subsequent inflationary pressures. He observed that Eurozone inflation rose from 2.9 percent in July to 3.3 percent in August. In Croatia, inflation is currently approaching the Eurozone average, with the gap narrowing to less than half a percentage point.

Despite the energy shock, the Eurozone economy has shown resilience, and economic activity may be stronger than previously anticipated. Žigman emphasized that the ECB remains committed to its medium-term goal of returning inflation to two percent, though high uncertainty remains regarding oil and gas price movements.