Croatia’s public debt reached €55 billion at the end of April 2026, an increase of €4.6 billion, or 9 percent, compared with the same month last year, according to the latest data from the Croatian National Bank.

The debt was also €2.7 billion higher than at the end of 2025, representing growth of 5.2 percent in the first four months of the year. On a monthly basis, however, the total fell slightly by €148 million.

The rise was driven primarily by increased borrowing by the central government. Its liabilities reached approximately €54 billion, accounting for more than 98 percent of Croatia’s total public debt.

Borrowing by municipalities, cities and counties has also continued to increase. The debt of local government units has now risen for 15 consecutive months, with annual growth remaining in double digits. In April, it was 21.4 percent higher than a year earlier, following an increase of 20 percent in March.

Social security funds moved in the opposite direction, reducing their debt by 32.2 percent compared with the previous year. Their share of the overall total remains relatively small.

Long-term borrowing remains dominant

Long-term financial instruments continue to make up the majority of Croatia’s public borrowing. Bonds account for approximately 65 percent of non-consolidated public debt, while the remainder consists of loans, deposits and short-term securities.

At the same time, the Ministry of Finance has substantially increased its issuance of treasury bills. As a result, domestic debt in the short-term securities category rose by 45.5 percent year-on-year, according to analysts from Raiffeisen Bank.

The expansion of treasury bill programmes has attracted growing interest from Croatian citizens, offering the government an additional source of domestic financing while giving households access to relatively low-risk investments.

Croatia continues to borrow mainly from domestic investors. At the end of April, they held 68.6 percent of the country’s public debt, compared with 31.4 percent held by foreign creditors.

Since Croatia joined the eurozone in 2023, the domestic share has generally remained close to 70 percent. This reflects a longer-term policy of strengthening internal sources of government financing and reducing dependence on international creditors.

Households increase investments in government securities

Croatian households have significantly expanded their holdings of government securities. Their investments rose from €3.9 billion to €4.9 billion within a year, an increase of approximately €1 billion.

Financial companies also increased their exposure to Croatian public debt. Their holdings climbed from €31.1 billion to €32.6 billion over the same period.

The figures indicate that domestic institutions and individual investors are playing an increasingly important role in financing the state. Strong demand from Croatian investors may help limit exposure to volatility in international financial markets, although the growing volume of debt still requires careful fiscal management.

Despite the sharp nominal increase, Croatia’s public debt remains below the limit established under the European Union’s Maastricht criteria. At the end of the first quarter of 2026, debt amounted to 58.4 percent of gross domestic product.

This was only 0.2 percentage points higher than a year earlier and remained below the reference level of 60 percent of GDP. Croatia’s position is also more favourable than that of many other eurozone countries, where public debt ratios are considerably higher.

Strong nominal economic growth has helped prevent the debt-to-GDP ratio from rising as rapidly as the total value of government liabilities. Inflation, wage growth and expanding economic activity have all increased the nominal size of the Croatian economy, partly offsetting the effect of additional borrowing.

Raiffeisen analyst Petar Bejuk expects Croatia’s public debt ratio to remain below 60 percent of GDP for the full year. He noted that the country’s fiscal indicators continue to compare favourably with the eurozone average.

Nevertheless, the €4.6 billion annual increase demonstrates that the government’s financing needs are growing. Maintaining fiscal space will be particularly important if Croatia faces weaker economic growth, higher borrowing costs or another external crisis.

The main challenge for policymakers will therefore be to ensure that increased borrowing supports productive investment without weakening the country’s ability to respond to future economic risks.