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World Bank Supports Government of Croatia in Mitigating Impact of Global Financial Crisis

January 12, 2010

WASHINGTON, January 12, 2010 – The World Bank today approved a EUR200 million (USD$297 million equivalent) Fiscal, Social, and Financial Sector Development Policy Loan for the Republic of Croatia, to support and recognize the Government’s efforts in alleviating the impact of the global economic crisis.

These efforts include measures taken by the government that, among others, have supported fiscal consolidation and improved public finance management, strengthened the system of social protection to provide better safety nets for vulnerable groups, and enhanced the efficiency and stability of the financial sector.

“So far, the Croatian authorities have managed the impact of the global crisis relatively well compared to other countries in the region,” said Theodore O. Ahlers, Acting Country Director for Central Europe and the Baltic Countries. “The loan approved today aims to help the country maintain macroeconomic stability and an appropriate  fiscal framework, to assist the most vulnerable groups in society to cope with the economic hardship and to further strengthen the financial sector. The World Bank enjoys a longstanding partnership with Croatia and is prepared to help the country move along the path to economic recovery.”

The loan has been approved at 6-month LIBOR for EUR plus a fixed spread (which would currently translate into an interest rate of about to 2 percent) with a 15.5-year bullet repayment pattern.

Since joining the World Bank in 1993, Croatia has benefited from financial and technical assistance, policy advice, and analytical services provided by the global development institution.  To date, the Bank has supported 43 operations with a total value of US$2.96 billion, and approved 52 grants with a total value of US$70 million.

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