Croatia Maintains Position Among EU Countries with the Largest Decline in Debt-to-GDP Ratio

Public debt in the EU and the eurozone, expressed as a share of GDP, decreased at the end of the third quarter of 2022, thanks to continuous economic growth, and Croatia maintained its position among the countries with the largest decline, according to a Eurostat report.

At the EU level, public debt amounted to 85.1 percent of GDP at the end of last September, calculated Eurostat. At the end of June, it was 86.4 percent. In the eurozone, it decreased from 94.2 to 93 percent. At the end of September 2021, it was 89.7 percent in the EU, while in the eurozone it was almost equal to GDP.

Debt increased in absolute terms, but the economy grew even stronger, statisticians explained the reduced debt-to-GDP ratio.

Croatia alongside Finland

The highest public debt expressed as a share of GDP was recorded at the end of the third quarter of last year by Greece, nearly double that of GDP.

Italy again took second place with debt nearly 50 percent higher than GDP. Following are Portugal, where it was higher by a fifth, and Spain and France, where it exceeded GDP by 16 and 13 percent, respectively.

In Croatia, the consolidated general government debt amounted to 45.689 billion euros at the end of last September, which corresponds to 70.4 percent of GDP, Eurostat states, noting that the amount was calculated based on the officially determined exchange rate of the kuna to the euro prior to entering the eurozone.

At the end of last June, it amounted to 45.636 billion euros, or 73.2 percent of GDP. At the end of September 2021, it was 45.856 billion euros, or 81.5 percent of GDP.

The closest to Croatia in terms of public debt as a share of GDP at the end of last September were Finland and Slovenia, where it amounted to 70.8 and 72.3 percent, respectively.

The lowest level of debt was recorded at the end of the third quarter of last year by Estonia, where it amounted to 15.8 percent of GDP. Also in the group were Bulgaria and Luxembourg, whose debt amounted to approximately a quarter of GDP.

Highlighted ‘Four’

In only four EU countries, public debt expressed as a share of GDP at the end of last September was higher than at the end of June, with the largest increase in Bulgaria and the Czech Republic, by 1.9 and 1.7 percentage points, respectively. Following are France and Sweden, where it increased by 0.3 and 0.2 percentage points, respectively.

Conversely, the share of public debt in GDP decreased the most compared to June in Greece, by 5.3 percentage points. Following are Cyprus, where it was lower by 3.8 percentage points, and Portugal, where it decreased by 3.3 percentage points.

Also in the group are Italy and Croatia, where at the end of last September, public debt expressed as a share of GDP was lower by three and 2.8 percentage points, respectively, than at the end of June.

Largest Decline

Croatia also ranked among the EU countries with the largest decline in public debt expressed as a share of GDP compared to September 2021, by 11.1 percentage points. Only Greece recorded a larger decline, by 24.7 percentage points, and Cyprus, by 15 percentage points.

Eurostat also highlights Portugal and Denmark in the group, where it decreased by nine and 8.8 percentage points, respectively. It was significantly reduced in Ireland, by 8.4 percentage points, as well as in Lithuania and Slovenia, by 7.3 and 7.2 percentage points, respectively.

Only the Czech Republic recorded a higher public debt than at the end of September 2021, by 4.7 percentage points, Eurostat determined.