Izvor: Glas Istre
Standard & Poor’s has affirmed Croatia’s long-term credit rating of ‘A-‘, with a positive outlook, highlighting “resilient” economic growth, along with “strong” fiscal indicators and the support of eurozone membership.
In September last year, S&P raised the rating of Croatia’s debt securities from ‘BBB+’ to ‘A-‘, explaining that deeper integration with European and global partners had encouraged the implementation of reforms and resulted in broader institutional improvement.
An ‘A’ rating signals strong capacity to meet financial obligations, with some degree of vulnerability to economic conditions and changes.
The agency confirmed the ‘A-‘ rating and positive outlook, noting that the Croatian government continues to implement reforms that could improve long-term prospects for economic growth.
Thanks to tourism and EU money, economic growth will be resilient to adverse conditions in the coming period, the agency says, with an estimate that activity will increase by 3.2 percent this year and by 2.7 percent in the period from 2026 to 2028.
US tariffs could only indirectly affect Croatia, through its key partners in the EU, since the Croatian economy is “relatively small” directly exposed to the US.
Croatia’s “institutional arrangements” will continue to develop in the coming period, and its integration into the EU will be deepened in parallel with the implementation of reforms, S&P believes.
Key measures include strengthening the judicial system, improving education and healthcare, and preserving economic growth by creating conditions for easier capital inflow and “tourist arrivals.”
Touring motorcycle
The main drivers of growth in the Croatian economy continue to be tourism and investments financed by EU loans and grants, they emphasize, with an estimate that the Croatian economy will grow by an average of 2.8 percent annually by 2028.
Croatia’s rating includes the economy’s notable reliance on tourism, with the forecast that wage and inflation trends will likely be more pronounced in the medium term than in larger eurozone members, the agency explains.
The key goals of Croatia are expanding the structure of the economy and improving productivity, which are especially important considering the aging of the population and its limited increase, according to S&P.
The rating of Croatia’s debt papers reflects both the strong budgetary and external positions and the advantages of membership in the eurozone, which function as an anchor for the monetary framework, they add.
The current account deficit is financed with non-debt money, including foreign direct investment and EU grants, they added.
This year, the balance of payments deficit should be 2.8 percent and rise to 3.1 percent in 2026, they calculated. By 2028, it should drop to 2.3 percent.
Long-term weight emigration
The positive outlook for the credit rating reflects the agency’s assessment that Croatia’s economic and external indicators could continue to improve, despite global uncertainty.
The implementation of reforms will continue, they predict, and the budget deficit will remain “moderate” in the coming period.
S&P could thus improve Croatia’s rating in the next 12 months if its external position improves, for example, as observed through a continuous improvement in the balance of payments current account.
Such a result could be achieved through higher export revenue, EU money or foreign direct investment, they note.
The rating could also be improved if the Croatian economy continues to grow strongly and if its resilience improves through continued reforms in the face of “challenges for global trade.”
The agency could, however, change the outlook to stable again and confirm the current credit rating if the trend of improving economic and external indicators stops, reflecting the risks arising from the narrow base of the Croatian economy.
This would suggest that insufficient progress has been made in addressing persistent bottlenecks to economic growth, S&P noted.
Long-term ‘weights’
The long-term burdens on Croatia’s growth and its public finances are “net emigration and the population situation,” they emphasize.
“The A-level credit rating is a confirmation of the trust of international financial institutions, as well as a positive signal to investors. It is also a message of responsible management of public finances, stable economic growth and effective absorption of European funds. In this report, S&P also emphasizes political stability, which is key to the Government’s numerous achievements. The goal of all government policies will continue to be to increase the living standards of citizens, reduce inflationary pressures and stimulate the economic development of Croatia,” said Prime Minister Andrej Plenković.
S&P announces continued strong growth in Croatia’s GDP. They estimate growth of 3.2 percent this year, and an average of 2.8 percent per year in the period 2025-2028. They emphasize the positive contribution of the implementation of reforms and investments financed by European funds – from the EU Recovery and Resilience Instrument and the EU Multiannual Financial Framework.
“This is a clear confirmation that the Croatian economy stands on solid foundations and that our reforms have been recognized, with stable public finances, strong European support and a clear perspective of economic growth. We are also aware of the challenges – from turbulent geo-economic relations that affect the level and structure of state expenditures to long-term complex demographic trends – but we continue to implement reforms in education, healthcare and the judiciary and invest in transport infrastructure and digitalization in order to increase productivity, ensure long-term competitiveness and the best possible quality of life,” said Deputy Prime Minister and Minister of Finance Marko Primorac.
