The total debt of counties, cities and municipalities more than doubled from 2002 to 2014, growing from HRK 2 billion in 2002 to HRK 4.5 billion in 2014, mostly due to loans, the Institute of Public Finance (IJF) says in a study.
In its latest newsletter the IJF underscores that the share of securities in the debt structure was considerably smaller than that of loans, accounting for HRK 200 million or 4% of the total direct debt in 2014.
Direct debt comprises all budget deficits in the current and earlier periods financed by short-term and long-term loans or securities. In addition to direct debt there is also potential debt that includes guarantees by counties, cities and municipalities issued to their public companies and institutions, IJF said.
The IJF underscored that the per-capita direct debt of counties, cities and municipalities more than doubled in the 2002-2014 period, increasing from HRK 480 to about HRK 1,000.
The study further pointed out that as much as 80% of the total debt of all counties (around HRK 570 million) related to only 10 of the 20 counties, and only one, namely Dubrovnik-Neretva County, had no direct debt in 2014.
The situation with cities is similar: 80% of the direct debt of all cities, with the exception of the City of Zagreb (about HRK 1.5 billion), relates to just 29 of 127 cities. Although the direct debt of the City of Zagreb is equal to that of the 29 cities combined, it is not significant given its revenue, the authors of the study said.
It is interesting to note that 22 cities have no direct debt at all or if they do it is less than HRK 100,000.
Data for the municipalities shows that about half of their direct debt (HRK 200 million) can be attributed to just 20 of the 428 municipalities and that around 60% of municipalities have no direct debt.
(EUR 1 = HRK 7.64)