Continuous government budget deficit resulted in increasing levels of public debt in Croatia. Although the primary mechanism of government debt financing has shifted from banks to a market-oriented system allowing government borrowing at lower costs, inadequate institutional infrastructure supports it. Debt management is governed by an organizational unit within the Ministry of Finance and the need to establish a Debt Management Office (DMO) is not yet recognized. The basic thesis of this paper is that reform of public debt management system is a precondition of efficient public debt management (PDM) in Croatia. The paper discusses current institutional, organizational, and functional aspects of PDM in Croatia, addresses specific problems, and presents suggestions for improvement of the Croatian PDM system.

Ekonomija