At the end of the third quarter of last year, Croatian public debt amounted to 285.9 billion kuna, which is 85.9 percent of GDP, 0.2 percentage points higher than in the previous quarter.
According to a report published on Friday by the European Statistical Office, Croatia’s public debt at the end of September last year was about 2.9 billion kuna higher than at the end of the second quarter, when it amounted to 283 billion kuna. In comparison to the third quarter of 2014, the debt in the third quarter of last year was higher by almost 16 billion kuna, thus its share in GDP increased by 3.6 percentage points, from 82.3 to 85.9 percent of GDP.
– We expect that in the last quarter of last year, public debt will reach around 88 percent of GDP due to new borrowings during that period, says Zrinka Živković-Matijević, director of the Economic Research Department of Raiffeisenbank Austria (RBA).
She emphasizes that public debt, considering the level of the economy and the growth dynamics, is too high and hinders stable and sustainable recovery.
– Public debt simply reflects the fiscal policy over a series of past mandates, representing accumulated budget deficits. It is one of the main reasons why the country’s rating is two notches below investment grade, and therefore it is a crucial area that the new government must address, concludes Zrinka Živković-Matijević.
In terms of the increase in the share of public debt in GDP by 3.6 percentage points year-on-year, Croatia ranks among the EU member states with the highest growth of this indicator. Ahead of Croatia are only Slovenia, with an increase of 6.2 percentage points, Austria, with 4.6 percentage points, and Cyprus, with 4.1 percentage points, while the Czech Republic, like Croatia, recorded an increase of 3.6 percentage points.
