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Croatia Rated Stable

Croatia  Rated StableCroatia  Rated Stable

Fitch Ratings said it has affirmed Croatia’s long-term foreign- and local-currency issuer default ratings at ‘BB’ with a stable outlook, SeeNews reported. The issue ratings on Croatia’s senior unsecured long-term foreign- and local-currency bonds have also been affirmed at ‘BB’, Fitch said late on Friday. The short-term foreign- and local-currency IDRs have been affirmed at ‘B’; the issue ratings on the senior unsecured short-term bonds have also been affirmed at ‘B’; while the country ceiling has been affirmed at ‘BBB-’, the ratings agency noted. The Croatian economy is benefiting from favorable cyclical conditions. Strengthening growth in regional trading partners, favorable wage and employment dynamics, robust tourism receipts and improved absorption of EU funds, resulted in real GDP growth rising to 3% in 2016 (the fastest since 2007), and are likely to support performance in 2017. Potential growth remains weak relative to peers, at 1%-2%, due to adverse demographics, structural rigidities, on-going external deleveraging and low investment during the 2009-2014 recession. Growth volatility is higher than ‘BB’ peers, as is unemployment, which was 13.1% at end 2016.

 

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