In the third quarter of 2015, foreign banks again reduced the funding of emerging European economies, with Croatia recording a markedly milder fall than in the second quarter, according to a Vienna Initiative survey.
Over July-September 2015, foreign bank’s funding in Central, Eastern, and Southeastern Europe (CESEE) decreased 0.3 percent of GDP. The same fall was recorded in the previous quarter.
The Vienna Initiative was founded, after the 2008 global financial crisis, by the European Investment Bank, the European Commission, the European Bank for Reconstruction and Development, the International Monetary Fund and the World Bank in order to prevent, in cooperation with the private sector, a withdrawal of foreign banks from emerging European economies.
The survey covers 21 countries and is based on Bank for International Settlements data. Financing decreased in most CESEE countries.
In Q3 2015, Croatia was among the countries which recorded a fall in foreign bank’s funding of 0.7% of GDP, together with Poland, Romania and Slovenia. In Q2, the fall in Croatia was 1.4% of GDP, the same as in Bulgaria, Russia and Ukraine.
The fall in foreign bank’s funding in Croatia began in Q1 2015, 1.9% of GDP, after a 0.2% increase in Q4 2014. Between Q4 2014 and Q3 2015, this fall was 3.8% of GDP.