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This paper, in its main section, empirically investigates and determines the characteristics and factors of credit lending and GDP and the correlation between private-sector lending and economic growth in the Republic of Croatia. The aim of this paper is derived from the main section, which is to identify and prove connections and interdependence between credit lending and economic growth in the Republic of Croatia. Therefore, this paper aims to provide a better understanding of how private sector lending affects economic growth and GDP growth. Namely, if quality loans with low-interest rates are provided to the economy, they will stimulate economic growth. In contrast, if there are no available loans, lower rates of economic growth and a decline in employment rates will occur. Based on the above, the following hypothesis of this paper was established as the starting point of the research, which reads: "There is a close positive relationship between private-sector lending and GDP growth rate." The methodology used in the paper consists of the basic methods of descriptive and inferential statistics, which have been applied to prove or disprove correlations between individual variables. The relevant statistical programs IBM SPSS Statistics 22 and MS Excel were used for analysis and presentation. It is therefore concluded that despite the existence of a tight positive link between private sector loans growth and GDP growth, there is a lack of linearity between them, which precludes any possibility of above confidence forecast of 79.3%, which is not sufficient for further research. |
