Croatia’s gross external debt stood at €40.9bn at the end of 2019, which is for 75.7 percent of the country’s annual GDP. This figure represents a continuing contraction of the size of the country’s foreign debt, but analysts expect it to increase in size in 2020 as a result of the coronavirus crisis. They believe that the need to secure financing to aid economic recovery and the resumption of business in the country will lead to companies in all sectors to turn again to debt secured abroad. This could return the gross foreign debt numbers back up to 90 percent of GDP, they warn. On the other hand, with leading central banks continuing to lower their key interest rates, the cost for Croatian companies to borrow should be significantly lower. The biggest contributor to Croatia’s external debt, of course, is the government itself as it had €12.9bn in outstanding liabilities as of the end of December. That was €1.1bn less than it was 12 months previously, a 7.6 percent decline made possible in part by the government’s increasing reliance on local institutions.
