In July, there was a strong increase in the public debt

This is how high monthly growth is a consequence of the srpanjskog of the issuance of government bonds in the domestic market in the amount of 6 billion to ten years with an interest rate of 4.5%. Thus the share of public debt in the estimated GDP exceeded the 87%, with a tendency to reach by the end of the year already alarming level of 90% of GDP. And at the annual level, continued high growth, so the total debt of General Government grew by 6.7% upon the growth of the internal debt for 6.8% and foreign debt for 6.5%.

Continuation of unsustainable dynamics of the aggravation of the situation with the public debt, which is primarily a consequence of the rollup of steadfast and the high budget deficit, is confirmed by data on the rise in public debt in the first seven months of this year, in which period the debt increased by 9.5 billion. By the General Government almost equally in the internal zaduživala (debt increased by 5 billion) and foreign financial market (the debt increased by 4.5 billion kuna). On the domestic market grew by publishing a to-do to bonds (for 5.8 billion) and the use of credits (for 2 billion kuna), while at the same time reduced the obligations based on Treasury bills (for 2.8 billion). And on the international market to the General Government primary zaduživala by issuing bonds (State debt increased by 6.8 billion), while the reduced credit obligations (for 1.8 billion) and liabilities short-term securities (for half a billion kuna). The bulk of the increment of the debt is the result of Central Government borrowing down the need of funding high budget deficit (increment the debt for 10 billion), while at the same time the local States reduce their level of debt for 0.5 billion, with practically negligible reduction of the levels of debt of the social security funds for 1.1 million kuna.

The movement of the public debt in July only is a continuation of the longer term tendencies of his extremely high growth “is, according to Eurostat data for the second quarter of this year, the share of public debt-to-GDP ratio increased by four percentage points in the past year, which is the largest increase among the countries of the European Union after Austria and Bulgaria (with the proviso that the share of public debt-to-GDP ratio in Bulgaria at the level of just 28.3%). According to official estimates, in the framework of the procedure of removing the prekomjernoga budget deficit (EDP tables), Croatia would this year could end up with a share of the public debt-to-GDP ratio of 89.2%, which is significantly higher than the proportion in the us similar countries (Bulgaria, Romania, the Czech Republic, Poland, Slovakia, Hungary and Slovenia). The high level of debt and deficits along with unsustainable high growth debt threatens the possibility of further reducing the already poor, neinvesticijskog the country’s credit rating and limits the prospects of economic growth. In the circumstances of the absence snažnijega of economic growth and inflation with all the more pronounced the effect of “snowball” (in a situation when the economic growth is lower than the interest rate paid on debt), debt burden will have to be dealt with more powerful by reducing a deficit budget, or by creating a znatnijega of the primary surplus, in order to state debt returned to sustainable limits.