Credit rating is a financial instrument used by foreign investors, wealth funds and pension funds to gauge the credit worthiness of Croatia. The credit rating in Croatia has a large impact on the country's borrowing costs. Businessmen interested in opening a company in Croatia regard the credit rating as an economic stability marker. The international credit ranking agencies have assigned a stable BB rating for Croatia during 2016. Our agents in company formation in Croatia can give you further details about the economic implications of the country`s credit rating.
In 2016, Croatia credit rating was maintained by the Fitch rating agency at a BB level, with a stable outlook. The experts pointed out that Croatia credit rating is generated by the improvement of the public finances and the exit from the excessive deficit procedure. The stability of the credit rating in Croatia is explained by a moderate inflation (1.1% in May 2017), a stimulated credit activity and the continuation of economic policies. Among the risks which should be taken into consideration by investors who want to start a company in Croatia are:
- the exchange rate fluctuations,
- the political uncertainty,
- the negative demographic trends.
An improved Ba2 credit rating was announced by Moody's in March 2017. Croatia's stronger than expected economic growth, after a six year recession, is the main reason for the rating provided by the renowned agency. The experts believe that comprehensive structural reforms and a more stable political environment could maintain the positive credit rating of Croatia. More information regarding credit rating and company registration in Croatia can be provided to you by our team of experts.
Several aspects are taken into consideration by financial experts when determining Croatia credit rating. These include the following:
• The economic improvement of the trading relations of Croatia with its traditional partners: Germany, Italy, Slovenia;
• A favorable evolution of wages and employment;
• Improved absorption of the EU funds and strong tourist inflows to the local budget;
• An expansionary monetary policy due to a moderate inflation;
• Croatia's debt burden was reversed in the upward trajectory.
Please feel free to contact our Croatian company incorporation agents if you need guidance in establishing a business in this country.