Croatia’s Gross External Debt Falls to 41.1 Billion Euro

Total Croatia News

ZAGREB, March 30, 2020 – Croatia’s gross external debt reached €41.1 billion at the end of November 2019, down by 1.6 billion or 3.8% compared with November 2018, but analysts predict a rise in external vulnerability caused by the coronavirus pandemic.

Compared with October 2019, external debt – which includes the external debt of the general government, the central bank, other monetary and financial institutions and other domestic sectors as well as direct investment – fell by 4.5%.

In the debt structure, the largest share, of 41.3%, accounted for other sectors, i.e. companies that had started to generate positive annual growth rates after three years od deleveraging.

The gross external debt of the public sector was €15.3 billion, a decrease of 8% compared with the end of 2018. The largest portion of this amount, €12.9 million, was owed by the central government, although its debt had been reduced by 7.3%. This was due to the maturity of a $1.5 billion bond which reduced the government’s external liabilities, analysts at Raiffeisen Bank (RBA) said.

Although the indicators for December will confirm a relative fall in external debt to 75.7% of GDP (by seven percentage points compared with the end of 2018), the new circumstances caused by the coronavirus pandemic will adversely affect relative external debt indicators already this year, RBA said.

It warned that a significant decline in economic activity, coupled with the high levels of external liabilities accumulated over the previous years, will lead to a deterioration in the country’s external vulnerability.

More economic news can be found in the Business section.


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