Croatia will seek to capitalise on rating upgrade

Significance

Both agencies cited strong economic growth, fiscal discipline, political stability and strengthened institutions as key factors behind their decision. With a speculative grade rating just five years ago, Croatia has made remarkable progress, surpassing the likes of Hungary, Bulgaria and Italy.

Impacts

• The upgrade will boost investor confidence in Croatia and attract more foreign direct investments.
• The rating upgrade will make Croatia less vulnerable to financial market shocks and reduce the risks of asset sell-offs.
• Companies in Croatia will benefit from lower borrowing costs and improved financing conditions.
• Banks holding Croatian government bonds may see improvements in collateral value and asset quality.