Croatia’s public debt in February 2018 was 281.9 billion kuna (€38.2 billion), which was 1.8 billion kuna (€243 million), or 0.6 percent, up from January 2018, and 925 million kuna (€125.5 million), or 0.3 percent, up from February 2017, analysts of the Raiffeisenbank Austria (RBA) said on Monday.

“Compared to February 2017, the increase in public debt was aided by the growth of foreign debt by 1.7 billion kuna (€230 million), or 1.6 percent, while the reduction of domestic debt moderated the stronger growth,” the analysis said.

Considering the economic growth is expected to continue in 2018, RBA analysts predicted that the debt-to-GDP ratio could continue to decline, after the last year’s drop of 2.6 percent.

“Inflation and the strengthening of the kuna against the euro are additional factors which could contribute to the fall debt-to-GDP ratio.

The continued presence of low interest rates creates a favourable opportunity for partial rearranging of the public debt’s portfolio structure,” the analysis said.

Expected good results from this year’s tourist season, along with keeping primary expenditure below the growth of nominal GDP, should have a positive effect on the public debt, they added.

According to the latest revised data on GDP by the state statistics bureau, the debt-to-GDP ratio was 77.4 percent at the end of 2017.

(€1 = 7.38 kuna)

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