by croatiaweek
August 7, 2025
in
Zagreb
ZAGREB, 6 August 2025 (Hina) – Croatia has officially become a creditor country of the International Monetary Fund (IMF), joining a group of just over 50 nations recognised for having a strong external financial position.
Experts from the Croatian National Bank (HNB) say this milestone confirms Croatia’s status as a financially stable country.
In a blog post published on the HNB’s website, Ana Martinis, Director of the HNB’s Directorate for Relations with International Financial Institutions, and senior adviser Marko Olenković explain the significance of this development and Croatia’s journey to becoming an IMF creditor.
From IMF Borrower to Creditor
Croatia’s path to this position is notable. In the 1990s and 2000s, the country relied on several IMF arrangements and loans to stabilise its economy and support recovery and growth.
Since joining the IMF in December 1992, Croatia had been a recipient of IMF assistance during challenging periods of transition.
Over the past several years, however, Croatia has recorded strong economic growth, a steady reduction of public and external debt, and improvements in its current account balance.
In January this year, the IMF assessed that Croatia’s external position was strong enough for it to become a creditor country. A key factor in this positive assessment was Croatia’s entry into the euro area in 2023.
Following approval from the IMF Executive Board, Croatia was added to the list of countries participating in the IMF’s Financial Transactions Plan at the end of January. This mechanism allows member countries to contribute to the financing of IMF arrangements.
Currently, 53 out of 191 IMF member states take part in the Financial Transactions Plan, including 18 euro area countries.
Supporting Global Financial Stability
As an IMF creditor, Croatia is now expected to contribute to the financing of loans to other member countries when called upon by the IMF. Contributions cannot exceed the amount of a country’s IMF quota and are typically far lower in practice.
The IMF aims to distribute financing responsibilities equally among creditor countries based on their quota share.
While commonly referred to as loans, these transactions do not function like traditional loans. Instead, creditor countries make their currency available to the IMF, and in return, their reserve position within the IMF increases.
This reserve position is a liquid claim that can be withdrawn if needed and is counted as part of a country’s international reserves.
Every time Croatia contributes funds through the Financial Transactions Plan, its reserve position and overall international reserves increase. The IMF pays interest on this reserve position at the market rate for Special Drawing Rights (SDRs).
How the Process Works
To illustrate how the process operates in practice, the HNB experts give an example: if the IMF approves a 100 million euro loan to a country and selects four creditor countries to finance it equally, including Croatia, each would provide 25 million euros.
In Croatia’s case, the HNB would first cash in a promissory note issued to the IMF and transfer funds to the IMF’s euro account held at the HNB. Using its account in the TARGET payment system, the HNB would then transfer Croatia’s 25 million euro share to the borrowing country. This transaction increases Croatia’s reserve position in the IMF, contributing to the country’s overall international reserves.
Recognition of Economic Strength
By becoming an IMF creditor, Croatia has joined the ranks of economically and financially stable nations. It is also actively contributing to global financial stability and supporting the rules-based international financial system.