Compared to the end of 2016, gross external debt has grown by 350 million euros, or 0.8 percent
According to Croatian National Bank (HNB) data, gross external debt amounted to 42 billion euros at the end of February, 0.2% less than the previous month, but 0.8% more than at the end of 2016, the analysis of Raiffeisenbank Austria (RBA) cited, as reported by Večernji List on June 5, 2017.
“Compared to the end of 2016, the rise of gross external debt is mostly the consequence of the rise of the commitments of the central bank for short-term loans and debtor commitments to non-resident direct investors and horisontally connected companies,” the RBA analysis stated, published on Monday.
In it, it is noted that data for February confirms the repayment towards foreign creditors by other domestic sectors, companies, financial institutions and the state.
“The reduction of the gross external debt is expected by the end of the year, so, along with the increase of the economy, the share of gross external debt in the GDP will confirm the reduction of the external vulnerability of Croatia,” the analysis noted.
Gross external debt of other domestic sectors, mostly private companies, holds 35% of the total debt and amounted to 15 billion euros at the end of February.
On the monthly level, it grew by 108 million euros, while it is lower by 133 million euros when compared to the end of 2016.
“The trend of external debt reduction is confirmed by negative growth rates which have been present almost continuously since April 2011. Compared to February of 2016, commitments to external creditors by companies are lower by 853 million euros or 5.3%,” RBA analysts stated.
The greatest reduction at the annual level, 27%, was made by other monetary institutions, meaning banks, whose gross commitments to external creditors were 4.4 billion euros at the end of February.
“Banks have reduced the debt due to relatively cheap domestic deposits, high liquidity and owing to the still modest demand for loans. We believe this scenario is nearing its end, which would keep the level of external debt at the current level,” the analysis cited.
Analysts estimate that the data for March should show an increase of gross debt in Croatia, as in that month, the state issued an international bond on the European market valued at 1.25 billion euros.
