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Household debt increases to 38 pct of GDP

ZAGREB, Feb 18 (Hina) - The overall household debt in Croatia has continued to grow, with the estimated household debt to GDP ratio increasing from 35.9 per cent at the end of 2005 to 38 per cent at the end of June 2006, according to the latest analysis conducted by the Croatian National Bank (HNB).
ZAGREB, Feb 18 (Hina) - The overall household debt in Croatia has continued to grow, with the estimated household debt to GDP ratio increasing from 35.9 per cent at the end of 2005 to 38 per cent at the end of June 2006, according to the latest analysis conducted by the Croatian National Bank (HNB).

The average debt per employee rose from around 58,000 kuna at the end of 2005 to some 63,000 kuna at the end of June 2006, but HNB analysts were not concerned about indicators of the household debt service burden.

The debt towards commercial banks continued to be the main debt category, accounting for around 96 per cent of the total household debt. Analysts attributed this to continued strong growth in the supply of increasingly cheap loans offered by commercial banks.

According to the latest figures, household loans with banks totalled 95.7 billion kuna at the end of December 2006, or 67,000 kuna on average per employee.

The central bank's analysis shows that the household debt to banks was nearly half as much in Croatia as that in most of the new EU member states. Expressed in euros, in mid-2006 it totalled 36.4 per cent of GDP in Croatia while in the new EU members it did not exceed 19 per cent of GDP.

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