Croatia’s Debt-to-GDP Ratio Below European Average

Croatia’s public debt expressed as a percentage of GDP was significantly lower than the eurozone and EU averages at the end of September 2023, according to data released by the European statistical office on Monday.

In the 20-member eurozone, the public debt-to-GDP ratio stood at 89.9 percent at the end of the third quarter of last year, down by 0.4 percentage points from the end of June, Eurostat calculations show. The same decline was recorded at the EU level, where it fell to 82.6 percent of GDP.

Compared to the end of June 2022, it decreased on average by about 2.2 percentage points. The debt-to-GDP ratio slightly decreased in both areas because GDP in absolute terms grew somewhat stronger than public debt. Compared to the end of September last year, it decreased in both areas on average by about 2.2 percentage points. At the end of September 2023, the gross general government debt amounted to €12.7 trillion in the eurozone and €13.8 trillion in the EU.

Croatia Still Alongside Germany

In approximately half of the EU member states, the public debt expressed as a percentage of GDP was above the prescribed ceiling of 60 percent at the end of September, as well as at the end of June.

The highest was again in Greece, where it was 65.5 percent higher than GDP. Italy followed, where it exceeded GDP by 40.6 percent. The group of countries with public debt slightly above GDP includes France, Spain, Belgium, and Portugal.

In Croatia, the consolidated general government debt at the end of September last year amounted to €47.9 billion and was almost unchanged compared to the end of June. Expressed as a percentage of GDP, it decreased at the end of September to 64.4 percent, down from 66.5 percent at the end of June, reflecting stronger economic growth. At the end of September 2022, it amounted to €45.8 billion, which then corresponded to 69.8 percent of GDP.

Germany was closest to Croatia in terms of public debt-to-GDP ratio at the end of September last year, with 64.8 percent. The lowest was again in Estonia, where it stood at 18.2 percent.

Spike in Belgium

At the end of September, the debt-to-GDP ratio was lower in 18 EU countries than at the end of June, with the most significant decrease in Cyprus, by 5.6 percentage points. Luxembourg and Portugal followed, with decreases of 2.6 and 2.5 percentage points, respectively. Croatia is also in this group, with a debt-to-GDP ratio in September lower by 2.2 percentage points than in mid-year.

However, it increased the most in Belgium, by 2.1 percentage points. Latvia was second, with an increase of 1.9 percentage points compared to the end of June.

Expanded Group

At the end of September, public debt expressed as a percentage of GDP was higher in eight EU countries than in the same period in 2022. This expanded the group by two countries. The most significant increase compared to September 2022 was in Belgium, by 2.5 percentage points, followed closely by Estonia and Lithuania, with increases of 2.3 and 2 percentage points, respectively.

The largest declines were recorded in Greece and Portugal, by 12 and 11 percentage points, respectively. Cyprus also saw a decrease of 10.3 percentage points. Eurostat highlighted Croatia in the group with a debt-to-GDP ratio at the end of September last year lower by 5.5 percentage points than at the end of September 2022.

Ireland was closest to Croatia, with a decrease of 4.9 percentage points, according to Eurostat data.