Public Debt Management in Croatia and Reforms in the SBA with the IMF Athanasios Vamvakidis IMF Resident Representative in Croatia April 19, 2006

Debt management matters It affects the cost of the government’s financing It can result in large changes in the stock of public debt It is important for fiscal sustainability It can affect response to economic shocks A crisis can take place because of bad debt management even when fiscal deficits are low

Think of the debt stock as the sea

Think of the deficits as the rivers

An example of a shock on the debt would be global warming

Debt management and the IMF SBA with Croatia Focus of SBA on external debt Debt management restructuring a structural benchmark Limits on government debt guarantees Limits on net borrowing of large public enterprises Implementation of permanent software solution in debt management Strengthening of staff and training in the debt management department Introduce an electronic system for treasury bill auctions Emphasis on transparency: fiscal ROSC

Debt management is a dynamic process It is always work in progress It requires continuous learning It should follow developments in financial economics and in IT

Debt management should be proactive, the best time to fix the roof is when the sun is shining

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