Croatia's Public Debt-to-GDP Ratio Drops Again to 74.5%

By 7 January 2019

ZAGREB, January 7, 2019 - At the end of September 2018, Croatia's public debt amounted to 281.8 billion kuna, down 0.9% on the year (-2.4 billion kuna), with the public debt-to-GDP ratio decreasing to 74.5%, its lowest level since 2012, when it was 69.4%.

According to Raiffeisenbank Austria (RBA) analysts, compared with the end of 2017, the public debt was 0.5% lower (-1.5 billion kuna), a result of a 6.6 billion kuna lower external debt. The internal debt went up by 5.1 billion kuna because of an increase in the central government's debt.

RBA analysts recall that on the last day of 2018, state guarantees for the Uljanik shipyard were enforced in the amount of 2.5 billion kuna, saying this will affect the balance of the general budget and public debt trends.

They say that amount refers only to the principal and that interest still has to be serviced, but trends in fiscal statistics will remain relatively favourable. This means a solid primary surplus and a further decrease of the public debt-to-GDP ratio for the fourth year running, they say, adding that the decrease will be helped by the continuation of economic growth and exchange rate trends.

RBA analysts predict the public debt-to-GDP ratio will stay below 75% at the end of 2018, nearly 10 percentage points below its highest level, recorded at the end of 2013, when it stood at 84%.

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