Public debt plays a large role in the Croatian economy. Specifically, the global economic and financial crisis has threatened the public finance system and put them at a disadvantage and destabilizing position. This resulted in a slowdown in economic growth and the emergence of a fiscal crisis, ie bankruptcy of states. The problem of public debt has captured a great deal of public interest and, as such, has a significant impact on the overall economy and international politics. When referring to public debt, many theorists always point to its adverse effect on economic growth. However, some studies show that public debt has both positive and negative impacts. Its positive impact and the complementary effect of public debt and economic growth are often questioned. The world of the new millennium is shaped by globalization, liberalization and technological development. Croatia has taken over some of the former state's external debt and tried to strengthen the economy with a relatively rapid transition, but the opposite has happened. Namely, the transition to a market-oriented economy has resulted in numerous costs that still burden all subjects of society today. The dynamics of growth in total external debt over the years has moved much faster than economic growth, leading to negative trends in the world economy.