Croatia's gross external debt at the end of August 2021 totalled €45.3 billion, which is up 2.8% compared to July or €4.5 billion (+11.1%) compared to August 2020 according to the latest data provided by the National Bank (HNB).

An analysis by Raiffeisenbank Austria (RBA), shows that compared to the end of 2020, the gross external debt has increased by €5.2 billion or 13% and that result is due to increased debt in all internal sectors, except in other monetary institutions or banks with their debt decreasing by €283 million. According to HNB, the external debt by other monetary institutions at the end of August amounted to €3.9 billion.

RBA analysts underscored that a strong economic recovery this year, which was confirmed with the growth in the third quarter, should contribute to a further reduction of the external debt to GDP ratio.

“In absolute numbers, we expect the gross external debt to continue growing due to an acceleration of economic activities and new borrowing on foreign markets both by the private and public sectors. We expect that, supported by the continuation of the expansionary monetary policy pursued by leading central banks, Croatia will continue to settle its external liabilities under favourable financing conditions,” the analysts said.

RBA analysts expect favourable loan conditions to continue in 2022 and a continuing decrease in external debt to GDP ratio, which will gradually decrease towards 70% of GDP in the years to come.