Croatia's public debt was 280.1 billion kuna (€37.8 billion) in January 2018, down 1.1 percent from December 2017, but up 0.4 percent compared to the same period the year before, analysts of Raiffeisenbank Austria (RBA) said on Friday.

The domestic debt went up by 0.5 percent, and external debt by 0.2 percent.

“The domestic portion of the debt was due to a 0.6 percent increase in the central government’s debt, primarily due to long-term bonds. The rise in foreign debt was also thanks to the rise in central government’s debt, by 0.3 percent,” RBA analysts said, commenting on the data recently released by the central bank.

The national statistics bureau recently said that the public debt-to-GDP ratio at the end of 2017 fell to 78 percent, its lowest level since 2012, when it stood at 69.4 percent.

However, the debt at the end of 2017 still amounted to 283.3 billion kuna, or 0.6 percent up from 2016, but since in 2017 Croatia’s GDP grew by 2.8 percent year-on-year, the public debt-to-GDP ratio fell by 2.6 percentage points in comparison with the end of 2016, when it was 80.6 percent.

“Considering that economic growth is expected to continue this year, the debt-to-GDP ratio could continue to decline. The return of inflation and the strengthening of the kuna against the euro are additional factors which should contribute to the reduction of the debt-to-GDP ratio,” analysts added.

The currently low interest rates remain to present a favourable opportunity for re-arranging the public debt’s portfolio structure, RBA said, adding that the expected good results of the upcoming tourist season, along with keeping the growth of primary expenditures below the growth of nominal GDP, would certainly have a positive effect on the public debt.

(€1 = 7.40 kuna)

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