The general government debt at the end of April 2022 was 356.1 billion kuna (€47.4 billion), 5.3 percent up from April 2021, state agency Hina said on Thursday, citing data released by the central bank HNB.

Both domestic and foreign components of the debt increased, with domestic debt going up by 7.6 billion kuna or 3.5 percent and foreign debt by 10.4 billion kuna or 8.7 percent, to 130.1 billion kuna (€17.3 billion). The foreign debt increase reflects the issue of a €1.25bn euro-denominated bond issue on the international financial markets in April.

Hina cited unnamed analysts from Raiffeisenbank Austria (RBA) who said that “considering that the euro bond issue was used to refinance a euro bond due on 30 May 2022, a decrease is expected already in data for May.”

Year-on-year, however, they expect the general government debt to continue growing due to growing needs for financing, “primarily due to trade unions’ demands for higher pay in the context of growing inflation, as well as due to fiscal measures designed to alleviate the impact of rising prices on consumers and the business sector.”

“Nonetheless, the continuation of economic recovery will keep the debt-to-GDP ratio moving downward this year and in the years ahead. Even though fiscal risks are growing, we expect the general government deficit to stay at 3 percent of GDP,” they were quoted as saying.

The government projects the public-debt-to-GDP ratio in 2022 to drop to 76.2 percent, down by 3.6 percentage from 2021.

(€1 = 7.51 kuna)