Standard & Poor's again boosts Croatia's credit rating

The Standard & Poor's rating agency stated on Friday that it had raised Croatia's 'BBB+' to an 'A-', with a positive outlook; estimating that the country's reform progress has further deepened its integration with European and global partners, resulting in broader institutional improvements.

The new rating signalises strong capacities for the fulfillment of financial obligations.

S&P says that Croatia's rating has been boosted by positive economic indicators, fiscal consolidation, the successful implementation of the National Recovery and Resilience Plan and political stability.

The company believes that political continuity, alongside the key policy anchors within Croatia's National Recovery and Resilience Program, could sustain reform momentum over the government's current term.

According to the company, the government continues to implement a comprehensive reform agenda aimed at reversing structural weaknesses that hamper economic competitiveness, as well as enhancing the efficiency of key institutions.

"We consider that the successful implementation of these reforms has the potential to unlock further economic and societal benefits, addressing the broader structural challenges of a declining population and sluggish productivity growth," they said.

"They have specifically underlined our political stability, our propensity towards the implementation of reforms, and the improvement of institutional capabilities. This, together with the significant investment of funds from the National Recovery and Resilience Program, gives us even more potential for further economic and social growth," said Finance Minister Marko Primorac.

Prime Minister Andrej Plenković said the impact would be felt across all levels of society.

"Citizens can expect a cheaper interest rate when taking out loans and companies can expect the same thing. Croatia, when issuing bonds or refinancing past bonds, will have better financial conditions on the open market thanks to this new rating. This positive economic and financial reputation will have an impact on everything. This increased rating is also a tool to help us achieve all our financial goals," said the prime minister.

This is a very positive signal about Croatia being a safe country for all investors both local and foreign ones, he added.

Despite all crises, we have managed to make economic growth, manage public finances in a responsible manner and have investments together with the absorption of European funds in the last eight years, Plenković stated.

"Croatia is on the right track, and we remain committed to pursuing the policies aimed at improving the living standards of our citizens, as our priority," said the prime minister.

S&P says that it forecasts that GDP will expand by an average of three percent per year over until 2027.

This will add to the strong rise in wealth over recent years and sustain steady income convergence with the eurozone average; which is good news for citizens.