November the 16th, 2020 – The words ”Croatian credit rating” are rarely followed by good news of late, especially as the ongoing coronavirus pandemic continues to cause havoc with not only the domestic economy but that of the entire world. Surprisingly, however, it seems that things might just be looking up for the Croatian credit rating in the eyes of all major rating agencies.
As Novac writes, the respected credit agency Moody’s improved its outlook of the Croatian credit rating a few days ago. However, even after this improvement, Croatia still remains in the ”investment” credit rating level in the eyes of Standard & Poor’s and Fitch, and in the non-investment rating with Moody’s, the Croatian Chamber of Commerce (HGK) said.
After deteriorating ratings in the years dominated by various types of economic crisis, positive trends in ratings or at least outlook finally began for Croatia back at the end of 2016, when all three of the largest agencies improved their respective negative outlooks for Croatia to a very welcome stable.
The last improvement in the Croatian credit rating or at the very least its appearance was back on June the 10th, 2019, when Fitch improved its rating and thus assigned Croatia an investment rank. Previously, this was done by Standard & Poors.
The current situation in the rating or appearance movement is primarily determined by the global situation and the present pandemic, and less by internal factors. Therefore, in April, Fitch changed the outlook for Croatia from positive to stable, which was not unexpected given the estimated decline in GDP for this year of about 9 percent, as well as the accompanying growth of the budget deficit and public debt. Such a decline in GDP, of course, cannot be viewed in isolation from the global environment, because the European Union’s economy, according to European Commission estimates, should fall by 7.4 percent, and the global economy by -4.4 percent.
When looking at Croatia, in the long period since way back in 1997, Moody’s changed its view of the Croatian credit rating only twice until yesterday, while Fitch and S&P changed their ratings six times each within the same time period.
This is certainly good news for Croatia, and a step towards an investment rating with all three of the most important and well respected credit rating agencies, despite the current situation caused by the pandemic, the Croatian Chamber of Commerce reports.
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