Indebtedness and economic growth in Croatia

Javni dug Republike Hrvatske je do 2016. godine bio u stalnom porastu, a razlog tome je rastući deficit, odnosno iskazani veći državni rashodi od državnih prihoda te se država morala financirati zaduživanjem. Javni dug se razlikuje ovisno o tome zadužuje li se država kod domaćih vjerovnika, tako zvani unutarnji dug ili na inozemnom tržištu te tada govorimo o vanjskom dugu. Ukupni javni dug uključuje vanjski dug i domaći dug. Država se najčešće prilikom zaduživanja koristi izdavanjem državnih obveznica, kao instrumentom za dobivanje likvidnosnih sredstava. Veličina javnog duga važan je čimbenik dinamike i strukture gospodarskog rasta svake zemlje. Što se država više zadužuje i što je javni dug veći, to se gospodarstvo zemlje usporava jer se prihodi dobiveni iz privrede koriste za financiranje cijene javnog duga te se sve manje ulaže u razvitak i unapređenje gospodarstva. Iz toga je jasno vidljiva korelacije između javnog duga i gospodarskog rasta, što se i nastoji prikazati kroz ovaj diplomski rad. Ukoliko vanjski dug prijeđe 50%-tnu penetraciju u BDP-u, ekonomija postaje izuzetno osjetljiva na šokove nestabilnosti financijskih tržišta i rasta kamatnih stopa, servisiranje duga postaje veliko opterećenje, a zemlje ulaze u razdoblje slabljenja dinamike ekonomskog rasta. Visoka javna zaduženost loše utječe i na privatne investicije te snižava konkurentsku sposobnost realne ekonomije. Sukladno tome može se zaključiti da rast javnog duga na rast BDP-a može utjecati i pozitivno i negativno. Iz duga se financiraju investicije i potrošnja. Veće investicije i potrošnja dovode do rasta BDP-a. Ukoliko su investicije namijenjene proizvodnji i povećanju proizvodnosti, mogu dovesti do većeg izvoza čime se povećava neto izvoz što sve rezultira rastom BDP-a. U suprotnom slučaju, ukoliko je javni dug generiran za potrebe financiranja tekuće potrošnje, tada može samo privremeno pozitivno utjecati na rast BDP-a. Republika Hrvatska nije jedina zemlja s visokim javim dugom, velika većina država ima javni dug, ali jedina je razlika u tome koliko se dobro javni dug kontrolira te koliko su dobro uravnotežene javne financije .Until 2016, the public debt of the Republic of Croatia was growing steadily, and this was due to the growing deficit, i.e. higher government expenditures than state revenues, and the state had to finance by borrowing. Public debt differs depending on whether the state borrows from domestic creditors, so called internal debt, or from foreign markets, and then we are talking about external debt. The total public debt includes foreign debt and domestic debt. When borrowing, the state most often uses the issuing of state bonds as a means of obtaining liquid assets. The size of public debt is an important factor in the dynamics and structure of economic growth of each country. As the state borrows more and more and the public debt increases, the country's economy is slowing down, as revenue from the economy is used to finance public debt prices and less is invested in developing and improving the economy. From this, there is a clear correlation between public debt and economic growth, which is the main focus of this graduate thesis. If external debt exceeds 50% penetration in GDP, the economy becomes extremely vulnerable to the shocks of financial market instability and interest rate growth, debt servicing becomes a major burden, and countries enter the period of weakening of the dynamics of economic growth. High public indebtedness also has a negative impact on private investment and lowers the competitive ability of the real economy. The Republic of Croatia is not the only country with a high public debt, a large majority of countries have public debt, but the only difference is how well public debt is controlled and how well balanced public finances are. Consequently, it can be concluded that the growth of public debt can affect the GDP growth both positively and negatively. Debt funds investment and spending. Greater investment and spending lead to GDP growth. If investments are aimed at production and productivity growth, they can lead to higher exports, thus increasing net exports, all resulting in GDP growth. Otherwise, if public debt is generated for the purposes of financing current consumption, then it can only temporarily positively affect GDP growth