ZAGREB, Aug 27 (Hina) - Compared to some countries in transition in its surrounding, Croatia mostly has negative foreign debt indicators, which is a result of an increasing foreign debt and unfavourable trends in some indicators,
Raiffeisen Bank analysts have warned.
ZAGREB, Aug 27 (Hina) - Compared to some countries in transition in
its surrounding, Croatia mostly has negative foreign debt
indicators, which is a result of an increasing foreign debt and
unfavourable trends in some indicators, Raiffeisen Bank analysts
have warned. #L#
Considering the fact that with regard to some indicators it is
lagging behind the countries which are to join the EU in the second
enlargement round, Croatia should pay more attention to its foreign
debt, the bank's analysts have stated in a study comparing the
country's foreign debt to that of Slovenia, Romania, Hungary,
Slovakia and Poland.
According to data at the end of May, Croatia's foreign debt totalled
18.995 billion dollars, an increase of 24.3 percent or 3.7 billion
dollars compared to the end of last year.
This information is even more unfavourable when compared to data in
the countries in the region, as over the past several years Romania,
Slovenia, Bulgaria and Slovakia have had lower nominal foreign
debts than Croatia.
Over the past several years Slovenia and Bulgaria have had lower GDP
than Croatia, Slovakia's GDP has been insignificantly higher than
Croatia's, while Romania's has been twice as high, the analysts
have said, citing some other indicators which give a more complete
picture of the burden the foreign debt places on the economy.
One of the most important indicators with regard to the foreign debt
is its share in GDP, which shows how much burden the debt places on
economic activity, with shares of up to 30 percent pointing to a
low, and those over 60 percent pointing to a high level of that
indicator.
The analysts state that Croatia is in the latter group, with a
foreign debt which in late 2002 accounted for 68 percent of GDP.
Only Bulgaria has a foreign debt accounting for more than 70 percent
of its GDP, but its debt has been stagnating. Romania's foreign debt
at the end of last year made up 28.6 percent of GDP. The trend of
increase of the share of foreign debt in GDP is present in Hungary,
Slovenia and Poland, however, last year Croatia saw the highest
rise. The three countries have a better credit rating than Croatia,
which provides them with better access to foreign markets, the
analysts have said.
Another unfavourable indicator is the relationship between
international reserves and the foreign debt, which is important for
the evaluation of the country's solvency and credit rating abroad.
Croatia, they say, is at the bottom of the ladder according to that
indicator.
RBA analysts expect that the share of the foreign debt in GDP will
decrease in the coming period if GDP continues to grow.
(hina) rml