Croatia’s Credit Rating to Be Upgraded Soon?

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Finance Minister Marić is an optimist.

Finance Minister Zdravko Marić said over the weekend that Croatia had received positive news from the Standard & Poor’s (S&P) credit rating agency for the second time in less than a year. He believes that the upgrade of credit rating outlook will soon be followed by a step forward in the credit rating itself, reports on September 24, 2017.

As we reported, on Friday, Standard&Poor’s kept the long-term credit rating of Croatia at ”BB” and short-term on ”B”, but raised the outlook from stable to positive, since the Croatian economy continues to grow, reducing the debt burden.

“In a little less than a year, Croatia has received positive news for the second time,” Marić said in a statement, pointing out that in December the agency improved the outlook from negative to stable. “Since 2007, the rating agencies have not made any improvements to our prospects, so I think this news is good,” he added.

Marić said that some of the Croatian economic analysts, who follow the international financial markets, in particular prices and yields on Croatian government bonds in secondary markets, expected that there might be a one-notch improvement in credit rating. “But, S&P analysts have decided to do it in two steps, by first improving our outlook, which suggests that Croatia is very close to the next level – upgrade of the credit rating itself,” said Marić.

He pointed out that S&P recognised that Croatia was on a stable path of growth of three percent, which is mostly due to Croatian businesses, but also to the government, which seeks to make the growth more sustainable and stronger. “I am pleased to see the efforts and results achieved in the field of public finances being recognized in this report. This is no longer a short-term trend. We have two years of good performance in public finances – a historically low level of deficit, and now even a small surplus of the general government budget. We are continuing the trend of declining public debt,” said the Finance Minister.

Marić also pointed out that S&P clearly stated that Croatia was in fine shape as for the issue of external imbalances, which have been a major problem for years, especially the high current account deficits. “Croatia now has a surplus in the current account, when you take into account imports and exports of both goods and services, which includes tourism,” Marić said.

He added that S&P also pointed to the next steps that Croatia has to take in the direction of structural reforms that will enhance the potential of the Croatian economy and make economic growth more stable and sustainable, which will result in further improvement of public finances.

Responding to questions about the budget for the next year, Marić said that next year the budget deficit would not exceed one percent of GDP, which will bring a further reduction in public debt, from 81.1 percent of GDP this year, by additional 2.5 percentage points.

He considers the S&P’s expectations about the reduction of public debt to 75 percent of GDP by 2020 as entirely realistic. “We will do everything we can to be even better than that,” Marić said, recalling that the government programme states that the share of public debt should decrease by ten percentage points over a period of four years. “In the first and the second year, we have achieved even better results than the estimates,” Marić concluded.

Translated from


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