ZAGREB, Sept 22 (Hina) - Croatia's foreign debt in the first five months of 2003 increased by 25 percent compared to last year, and a similar growth rate was recorded in Slovenia (24.1 percent), Slovakia (24.2 percent) and Romania
(27.2 percent). However, the share of the external debt in GDP affects economic activity in Croatia much more than in other countries, analysts with Raiffeisenbank (RBA) have said.
ZAGREB, Sept 22 (Hina) - Croatia's foreign debt in the first five
months of 2003 increased by 25 percent compared to last year, and a
similar growth rate was recorded in Slovenia (24.1 percent),
Slovakia (24.2 percent) and Romania (27.2 percent). However, the
share of the external debt in GDP affects economic activity in
Croatia much more than in other countries, analysts with
Raiffeisenbank (RBA) have said. #L#
The share of the external debt in GDP exceeding 60 percent points to
a high level of that indicator. The external debt of 68.4 percent of
GDP at the end of last year has increased this year to over 70
percent.
According to data from the Croatian National Bank released in July,
the external debt totalled 19.2 billion dollars and was by 3.9
billion higher compared to the end of last year.
The increase of the external debt was caused, among other things, by
the depreciation of the US dollar against the euro of some 10
percent in the first seven months. However, the depreciation of the
euro by 4.64 percent in relation to the dollar in August could still
lead to a decrease in the dollar amount of the external debt in
August.
If compared with other countries in transition, it is evident that
Croatia's external debt in the first five months did not grow more
than it did in other monitored countries. Slovenia recorded a
similar growth of 24.1 percent, Slovakia saw 24.2 percent and
Romania 27.2 percent debt growth.
Only Bulgaria's external debt at the end of last year accounted for
more than 70 percent of GDP, but unlike Croatia, the external debt
in Bulgaria has been decreasing over the past two years. It is
evident that Croatia saw the highest increase in the external debt
last year (compared to other monitored transition countries).
Slovenia and Poland have also seen an increase in the external debt,
but the two countries have a better credit rating than Croatia,
which grants them more favourable access to foreign markets.
Considering the unfavourable trend of growth of Croatia's external
debt and some other external debt indicators in relation to
countries which are about to join the EU, RBA analysts estimate that
the external debt should be closely monitored. They also state that
the HNB's latest measures aimed at decreasing the current account
deficit should also affect the external debt. If GDP continues to
grow (by some five percent), the analysts expect that the share of
the external debt in GDP in the coming period would be less than the
expected 75.5 percent in 2003.
(hina) rml