On Friday night in London, the international credit rating agency announced that it had changed its rating to “Baa2”. simultaneously improved the classification of long-term Croatian public debt obligations by two notches to “A3”. At the same time, Moody’s rating outlook is the same as before modified from positive to stable.
In its justification for improving the rating, the company highlighted that, according to its expectation, the Croatian public debt to GDP ratio will be 57 percent at the end of 2024, 14 percentage points lower than the level measured before the coronavirus epidemic in 2019 and almost 30 percentage points lower at the peak of the epidemic. , at the rate achieved in 2020.
According to the analysis Croatia’s sovereign debt burden is declining much faster than the rate expected by Moody’s in 2022, at the time of the last upgrade of Croatia’s debt rating.
In addition, Croatia’s debt stock is decreasing to a much greater extent than most sovereign debtors with a similar classification, as well as the reduction of the debt burden of the partner states in the region – states Moody’s justification.
According to the credit rating agency, all of this is largely the result of
the Croatian government succeeded in bringing the public financing balance back into balance
after the shock of the coronavirus epidemic. Moody’s emphasizes that the 7.2 percent GDP deficit in 2020 has turned into a smaller surplus by 2022.
Moody’s predicts average annual GDP growth in the Croatian economy of 3.5 percent by 2024 and around 3 percent in 2025-2026.
The cover image is an illustration. Cover image source: Portfolio
Source: www.portfolio.hu