Croatia’s Credit Rating to Be Upgraded Next Year?

Total Croatia News

After many years of downgrading, the trend could finally be reversed.

The Croatian economic and fiscal status has significantly improved recently, and the medium-term outlook is more promising, which suggests that Croatia could receive positive signals from credit rating agencies next year, according to analysts of Erste Bank, reports on November 20, 2017.

In their latest estimates, the Erste Bank analysts point out that the budget deficit was below one percent of GDP in 2016, while similar levels of the deficit are expected this and in coming years. They also emphasise the improvement in the sustainability of the public debt levels, which is supported by lower state budget deficits and the activities conducted by the Ministry of Finance related to the better refinancing of domestic and foreign debt.

The analysts also note that Croatia came out of the European Commission’s excessive deficit procedure (EDP) in June this year.

Croatia’s macroeconomic indicators are robust, according to the Erste Bank analysts, and this year it is expected that the GDP will grow by around three percent, which is expected in the medium term as well. They also believe it is significant that the growth is spread throughout various economy sectors and GDP components, making it much more viable.

In addition, the situation with Agrokor, Croatia’s largest privately-owned company which has been in crisis since the beginning of this year, currently seems more stable (although there are still many uncertainties), and the analysts see no significant risks to the country’s political stability.

“Therefore, we believe that all major credit rating agencies could upgrade Croatia’s rating by one notch during the first half of 2018,” they conclude in their analysis.

All three leading global rating agencies – Fitch, Standard & Poor’s and Moody’s – currently have Croatia’s credit rating two notches below the investment level. But, while Fitch and Moody’s rate the outlook as stable, Standard & Poor’s announced in September that the outlook was positive, which means it could soon decide to upgrade it.

Translated from


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