In September 2015 Croatia's public debt was reduced by 1.4 billion kuna to HRK 285.9 billion, however, the public debt growth rate remained high on the year as the debt increased by HRK 15.9 billion mostly as a result of the need to finance the high budgetary deficit generated by the central government, the Croatian Chamber of Commerce (HGK) said on Monday.
The HGK said that public debt in September 2015 was up 5.9% on the year, caused mostly by the central government whose debt increased by 6.1%. Local government debt at the same time was reduced by 5.2%.
In the first nine months of 2015, public debt was up HRK 6.3 billion, with domestic general government debt going up by HRK 6.2 billion and foreign debt by HRK 100 million. During that period central government debt increased by HRK 6.4 billion while local government debt decreased by HRK 412.4 million.
The HGK said that the state had borrowed the most on the domestic market by issuing bonds -- in the first nine months the debt increased by HRK 9.7 billion. Loans were up by one billion kuna in the said period, while short-term financing through treasury notes was reduced by HRK 4.4 billion.
The HGK said that a high budgetary deficit and strong public debt growth kept the country's credit ratings by all three main credit rating agencies below the investment level with negative outlooks, which increases the costs of borrowing.