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Monetary policy in the role of boosting the export competitiveness of the Croatian economy

Export competitiveness is one of the major indicators of the economic competitiveness and it can be globally monitored both on the level of a country's total export and according to particular sectors and products. The monetary policy executed by the central bank is a component of a country's macroeconomics policy and it has a significant influence on the whole growth and development, as well as on price stabilization and control inflation. That means it has a powerful influence on the export competitiveness of a specific national economy, and especially on a small and open economy, as the Croatian economy actually is. In order to achieve the objectives of the monetary and foreign exchange policy, the Croatian National Bank (CNB) can stipulate measures and instruments needed to regulate credit activity and banks' liquidity as well as regulating the amounts of money in circulation and establish rules regarding interest rates and domestic currency exchange rate. The global financial and economic crisis has further intensified two crucial problems of the Croatian economy, that has been intensified for years, and they are the following: the balance of payments on current account's deficit, that amounted to €2.5 billion or 5.5% of the GDP in 2009 and the foreign debt that reached €44 billion or 98.5% of GDP by the end of 2009. These two problems define future economic movements and represent the basic challenge for monetary and economic policy as a whole. In this work we have investigated and analysed the export competitiveness of the Croatian economy, trying to answer the question to what extent the existing monetary policy has influenced the particularly low Croatian export competitiveness. Furthermore, we suggested the feasible appropriate measures of the monetary policy in the role of boosting the export competitiveness of the Croatian economy

monetary policy, export competitiveness, foreing currency exchange rate, inflatio, balance of payment

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