Standard & Poor’s has raised the credit rating of Croatia by one notch to BBB. The credit rating agency has stressed the “structural improvements of Croatia’s economy and a strong political backbone in the form of the newly confirmed European Union candidate status.” This is the first time S&P has revised Croatia’s rating in the last seven years.
The long term foreign currency rating was raised from “BBB-” to “BBB” with a “Stable” outlook. Additionally, the short-term foreign currency rating was upgraded to “A-3”. At the same time, the credit ratings for domestic currency debt remained at “BBB+” and “A-2” for the long and short-term debt, respectively.
“Further rating improvements will require continued fiscal consolidation, progress with structural reforms, and effective integration into EU structures,” said a Standard & Poor’s credit analyst. “Conversely, a loosening of fiscal consolidation or a reversal of the current stabilization of external debt dynamics could give rise to downward pressure on the ratings.”
“The improvement in Croatia’s rating certainly improves the local capital market’s investment profile,” says the head of custody at HVB Splitska banka in Zagreb.