S&P affirms Croatia's A- rating, with positive outlook

Standard & Poor's has affirmed Croatia's A- credit rating with a positive outlook, reported the Ministry of Finance.

In an analysis published on Monday evening, Standard & Poor's said that Croatia's ongoing reforms and strong economic growth will help maintain stable income growth.

S&P estimates that the Croatian economy will grow relatively strongly, averaging around 2.9 percent over the period from 2025 to 2028, thanks to strong tourism, investments and a recovery in external demand.

The agency says that moderate fiscal consolidation will help reduce the budget deficit to around 2 percent of GDP by 2028 from an estimated 2.6 percent in 2024.

This, it is stated, will lead to a decline in the share of general government debt to approximately 51 percent of GDP in 2028, while in 2022 it was 68 percent.

According to S&P, capital account inflows - primarily EU grants - and stable foreign direct investment are covering current account deficits, thus supporting continued deleveraging until 2028.

At the end of last week, the Fitch agency also confirmed Croatia's A- rating, with a stable outlook, noting fiscal discipline and strong economic growth, but also a small economy that is vulnerable to external shocks.

The 'A' rating signals to debt buyers that Fitch expects a low risk of debt default and that repayment capacity is strong, although they may still be more vulnerable to adverse business and economic conditions than higher-rated countries.

With a stable outlook, Fitch indicated that it will keep the rating at 'A-' for the foreseeable future.

Source: HRT