Croatia's public debt totalled 298.8 billion kuna (€39.7 billion) at the end of Q1 2020 or 74.3 percent of the nation's GDP. This is 1.1 percentage point higher public debt-to-GDP ratio from Q4 2019, with analysts saying that further increase of debt is inevitable.

Compared to end of 2019, Croatia’s public debt increased by 5.9 billion kuna (€783 million), or 2 percent.

The public debt started to grow in March in the wake of the economic lockdown imposed to contain the Covid-19 epidemic, Raiffeisen Bank analysts said, adding that the debt increase in Q1 2020 was also a result of borrowing on the capital market with bond issues.

In Q1 2020, 15 billion kuna worth of bonds was issued on the domestic market. In early May, a €1.4 billion bond was issued, followed in June by a €2 billion issue on the foreign market, and a borrowing of 5 billion kuna (€664 million) on the domestic market.

Amid the impact on the economy that continent-wide lockdowns are certain to inflict, the increase of government debt is “inevitable,” analysts said, which is likely to push the public debt-to-GDP ratio to over 80 percent, levels last recorded in 2016.

According to government projections, the expected drop in 2020 GDP of 9.4 percent will put the ratio at 86.7 percent.

(€1 = 7.53 kuna)