ZAGREB, January 24, 2018 – At the end of the third quarter of 2017, Croatia’s government debt totaled 291.6 billion kuna, 4.2 billion more than in Q2, as a result of which the government debt to GDP ratio increased from 80.9 to 81%, according to Eurostat data released on Wednesday.
Compared with the third quarter of 2016, Croatia’s public debt was 2.5 billion kuna higher, but the government debt to GDP ratio slid from 83.4 to 81%. The annual ratio decrease, despite the debt’s nominal increase, was a result of a 3% economic upturn in the first nine months of 2017.
Croatia’s government debt to GDP ratio puts it below the European Union average of 82.5% at the end of Q3 2017.
The highest ratios of government debt to GDP at the end of the third quarter of 2017 were recorded in Greece (177.4%), Italy (134.1%) and Portugal (130.8%), and the lowest in Estonia (8.9%), Luxembourg (23.4%) and Bulgaria (25.6%).
Croatia’s government debt to GDP ratio has been decreasing for some time and Croatian economists expect the positive trends to continue.
Although the government was very active on the domestic and international capital markets in last year’s last quarter, issuing 1.275 billion euro in bonds on the European market and 5.8 billion kuna on the local market, the state of the government debt should not change since it’s about refinancing old debts, said Zrinka Živković-Matijević of Raiffeisenbank Austria.
New issues will improve the debt structure and reduce interest costs, she said. Taking into account the projected economic growth for 2017, we expect government debt to GDP ratio to continue to fall below 80%, she added.
