ZAGREB, May 26, 2020 – Croatia’s foreign debt totaled HRK 41.1 billion in January, falling by 6.5% compared to January 2019, however RBA analysts predict a rise in the debt throughout 2020 due to the corona crisis.
Croatia’s gross foreign debt of 41.1 billion at the end of January 2020 rose by 0.6% from December 2019 when it amounted HRK 40.9 billion, however, it contracted by 2.8 billion euros or by 6.5% on the year, according to the figures recently published by the Croatian National Bank (HNB).
However, considering the new circumstances in connection with the coronavirus pandemic that caused a lockdown globally as well as in the Croatian economy, RBA analysts expect the deterioration in Croatia’s external vulnerability.
The analysts said that a positive streak in the current account since 2013 would be likely snapped, and the country’s gross foreign debt would rise both in the real and nominal terms.
“Recovery and relaunching the economic activity, which will require high amounts of funding, will lead to a rise in the borrowing abroad by all key sectors,” said the analysts of the Raiffeisenbank Austria (RBA).
The recall that the government has recently planned more borrowing both on the local and foreign markets.
As a result of growing debt and the expected sharp economic downturn, Croatia’s gross foreign debt to GDP ratio is likely to increase, too.
At the end of 2019, Croatia’s gross foreign debt to GDP ratio was 75.7%.
(€1 = HRK 7.579243