Croatia's gross foreign debt at the end of November 2018 totalled EUR 39.1 billion, 1.9 billion or 4.5% less than the year before, analysts at Raiffiesenbank Austria (RBA) have said, noting that the foreign debt to GDP ratio is expected to continue to fall.

“The current dynamic of the annual foreign debt decline has been going on since December 2015,” the analysts said in a comment on figures recently published by the Croatian National Bank (HNB).

The reduction of the foreign debt is due to an 11.7% drop in the debt of other monetary financial institutions, a 5.1% drop in the foreign debt of other domestic sectors and a decline in the general government foreign debt of 8.2%.

The gross foreign debt of other domestic sectors at the end of November was EUR 13.47 billion, continuing the trend of deleveraging that started in January 2016, the RBA analysts said in their analysis.

The general government gross foreign debt at the end of November was EUR 13.5 billion, 8.2% less than the year before.

“Negative annual growth rates were recorded for the third consecutive month. The annual gross foreign debt growth was reported only for the central bank, of EUR 275 million or 13.1%, and for direct investments,” the analysts said.

They expect that data for December 2018 will indicate a continuation of similar trends and that at the end of 2018 the foreign debt to GDP ratio should be below 75%.

Owing to positive economic trends and further deleveraging in all key sectors, the RBA analysts expect the share of gross foreign debt in GDP to continue falling this year as well.