Croatia's Public Debt Surges to €55 Billion
Debt rose by €4.6 billion in a year, yet Croatia remains below the Maastricht threshold of 60% of GDP. Citizen interest in government bonds is also growing.
Debt rose by €4.6 billion in a year, yet Croatia remains below the Maastricht threshold of 60% of GDP. Citizen interest in government bonds is also growing.
By the end of April 2026, Croatia owed its creditors a total of €55 billion, the Croatian National Bank (HNB) reported. This represents an increase of €4.6 billion, or 9%, compared to the same period last year.
Compared to the end of 2025, public debt rose by €2.7 billion, or 5.2%. However, April data also show a slight monthly decrease of €148 million.
The main driver of public debt growth is the central government, whose liabilities reached €54 billion, accounting for over 98% of Croatia's total public debt.
At the same time, the trend of borrowing at the local level is concerning. Municipalities, cities, and counties have seen their liabilities rise for 15 consecutive months, at double-digit rates. In April, the annual growth rate of their debt stood at 21.4%, up from 20% recorded in March. On the other hand, social security funds continued to reduce their debt, which is down 32.2% year-on-year.
The structure of the debt reveals that Croatia continues to rely on long-term instruments. Bonds account for about 65% of the non-consolidated debt, with the remainder consisting of loans, deposits, and short-term securities. Raiffeisen analysts particularly highlight the strong growth in the issuance of Treasury bills by the Ministry of Finance, which has led to a 45.5% year-on-year increase in domestic debt in the short-term securities segment.
Croatia predominantly finances itself on the domestic market. By the end of April, domestic investors held 68.6% of public debt, while foreign creditors accounted for 31.4%. After joining the euro area, the share of the domestic component stabilized at around 70%. Citizens' investments in government securities rose from €3.9 billion to €4.9 billion in just one year, and financial companies increased their exposure from €31.1 billion to €32.6 billion.
Although nominal debt is rising, the key indicator of indebtedness relative to the economy remains favorable. At the end of the first quarter of 2026, the public debt-to-GDP ratio stood at 58.4%, just 0.2 percentage points higher than a year earlier.
"Domestic fiscal indicators remain more favorable than the euro area average, primarily thanks to strong nominal economic growth," said Petar Bejuk, an analyst at Raiffeisen. For the full year 2026, he expects the public debt ratio to remain below 60% of GDP, with the caveat that fiscal policy should preserve enough room to respond to potential future risks.
