The total Croatian public debt at the end of April amounted to 279.3 billion kuna, which is a decrease of 0.6% or 1.6 billion kuna compared to March, while compared to the same month last year, a decline of 1.7% or 4.9 billion kuna was recorded, analysts from RBA reported based on the latest data from the HNB. Compared to the end of 2017, the total public debt is lower by 4 billion kuna or 1.4%.
>>>Public Debt Increased to 281.9 Billion Kuna
After two months of growth, the decrease in public debt on a monthly basis is the result of a reduction in both the internal and external components of public debt. Namely, the internal debt has decreased by 0.4% to 171.5 billion kuna, while the external component has been reduced to 107.8 billion kuna, achieving a monthly decline of 0.9%.
The reduction in the internal component of the debt was contributed by the decrease in the central government’s debt based on short-term debt securities, while the reduction in the external component of the debt was aided by lower debt of the central government based on long-term debt securities and loans.
>>>Last Year Achieved the First General Government Surplus Since 2002, Public Debt Fell to 78 Percent
Compared to April 2017, the decline in public debt was contributed by a decrease in the internal component of public debt by 6 billion kuna or 3.5%, based on borrowing through central government loans, while the increase in the external component mitigated a stronger decline. Given the expected continuation of economic growth this year, albeit at a somewhat slower pace, the share of public debt in GDP could continue to decline, estimate RBA analysts.
The return of inflation and the strengthening of the kuna against the euro are additional factors that should contribute to the reduction of the public debt-to-GDP ratio. Furthermore, the still present environment of low interest rates seems favorable for partial and cost-effective restructuring of the public debt portfolio.
>>>Foreign Debt Fell by 4.3 Percent to 40.2 Billion Euros
Ultimately, support for the fiscal metric certainly comes from expectations regarding the tourist season, which will act towards solid budget revenue. With the growth of primary expenditures maintained below the growth of nominal GDP, these movements will certainly positively impact public debt statistics, concludes RBA in its macroeconomic analysis.
