CROATIA'S CREDIT RATING REMAINS UNCHANGED IN SEPTEMBER

ZAGREB, Sept 2 (Hina) - Croatia's credit rating for September remains unchanged, at DB4d, according to the Dun&Bradstreet credit rating company. The DB4d indicator places Croatia among countries of moderate risk for investors. #L# While drawing up Croatia's risk profile for this month, the company considered numerous factors, such as the completion of the International Monetary Fund's (IMF) first review of the country's 14-month stand-by arrangement in August. D&B cites excerpts from the IMF's final review document, emphasising two factors -- the recent buoyancy of the Croatian economy and a deterioration in Croatia's external position against a backdrop of a rapid increase in the country's foreign indebtedness, which goes to support Croatia's risk factor in the past several months. The D&B report, as relayed by Zagreb's BonLine company, says that the efforts of the Croatian authorities to limit the recent credit expansion are yielding some results. On a positive note, the D&B says that GDP growth has been supported by a 5.8 percent expansion in industrial production between January and July. However, domestic demand is still strong, causing the country's already sizeable trade deficit to widen, the company assessed. D&B analysts stress a worrying fact that foreign bank lending to Croatia increased by 84.5 percent in the 12 months to April 2003. On the list of 25 countries in transition whose credit rating is assessed, Croatia stands tenth. Slovenia has taken the lead with the DB2c indicator, followed by Hungary with DB2d. This makes them countries of low risk for investors. Serbia and Montenegro, Bosnia-Herzegovina, Uzbekistan, Turkmenistan, Tajikistan, Georgia, Belarus and Albania remain at the end of the list with the DB6d indicator, meaning they are countries of very high risk for investors. (hina) lml sb