DRIVERS OF PUBLIC DEBT IN CROATIA

Due to methodological changes in national accounts statistics and reclassification within the general government sector institutions, public debt data in Croatia varied significantly over the last decade. The aim of this paper is to analyse the contribution of key drivers of general government indebtness during the period 2008-2014 based on statistical data provided by European Commission, Ministry of Finance, and Croatian National Bank. The analysis shows that central government deficit was merely one of the drivers of state indebtness during the observed period while the contribution of other drivers were exceptionally high. The insight into drivers of public debt presents the foundation for both fiscal policy and public debt management policy formulation that can contribute to reduction of government borrowing costs and public finance sustainability.