Croatia External Debts Hits All-time High
Croatia’s external gross debt has hit 46.4 billion euro, an all-time record, 108 per cent of the annual GDP, the country’s main bank reported.
Compared to the same period in 2013, the Croatian National Bank, HNB, reported a 3.3-per-cent rise in the debt in the first trimester of 2014.
The biggest concern is the upward trend of the debt, which has constantly risen for five straight months.
Analysts from Raiffeisen Bank Austria, RBA, pointed that the external debt is a result of both a rise in financial obligations and a fall in Croatian GDP.
“The growth of obligations towards international creditors, which have risen by 800 million euro… was created by the activity of private non-financial companies,” the RBA analysis noted.
The same analysis pointed that the gross foreign debt of the government fell by 250 million euro in the same period.
Nevertheless, RBA analysts point that the debt will increase in the second trimester due to the issue international bonds, worth 1.2 billion euro, on the European market.
“Annual growth of the general government debt of 16.8 per cent vividly illustrates the relatively high government needs for (re) financing its obligations,” RBA analysts said.
They pointed out also that credit institutions, such as banks and savings banks, enlarged their portion of the debt by 244 million euro in the first trimester.
“We expect credit institutions to continue borrowing money this year [because of]... a lack of projects in the corporate sector and a substantial demand for loans,” the RBA analysts said.