ZAGREB, April 14 (Hina) - Croatia's arrangement with the International Monetary Fund should encourage foreign investors to make bigger investments in Croatia, however, the expected privatisation revenues could be affected by
developments in Macedonia, reads the April report of the international credit rating agency Dun & Bradstreet (D&B).
ZAGREB, April 14 (Hina) - Croatia's arrangement with the
International Monetary Fund should encourage foreign investors to
make bigger investments in Croatia, however, the expected
privatisation revenues could be affected by developments in
Macedonia, reads the April report of the international credit
rating agency Dun & Bradstreet (D&B). #L#
Croatia's credit rating for April remains the same in relation to
March - DB4d, which is the category of countries of moderate
investment risk. The neutral development of Croatia's rating,
however, means that the risk factor has not been significantly
reduced despite some positive changes in the country's political,
business and macroeconomic environment.
Croatia's investment risk profile this month has been positively
affected by local economic developments but it also suffered an
adverse effect of deteriorated stability in the region, reads the
D&B report, carried by the Zagreb company BonLine.
In March, the IMF granted Croatia a stand-by loan enabling the
country to immediately draw part of the approved funds, but D&B
experts have assessed that, given its high stability of reserves,
Croatia primarily needs more foreign investments. The IMF loan
should encourage foreign investors to make more significant
investments in Croatia. A commended three-year economic programme
of the Croatian government, which defines economic growth,
stability of prices, wage discipline and structural reforms as the
main goals, should also help boost investments. The government has
also been advised to define wage scales for civil servants, reduce
the number of government employees and maintain firm control over
the finances of the health and pension funds and accelerate the
privatisation process.
Although Zagreb may have been ignoring it, the expected
privatisation revenues could be adversely affected by developments
in the region, especially Macedonia, D&B experts say.
Should the ethnic conflict in Macedonia flare up, the interest of
foreign investors in the privatisation of Croatian companies could
wane, which would significantly affect the execution of the state
budget.
The government, which this year plans to resume the privatisation
of Croatian Telekom, will have to take into account the fact that
privatisation revenues could decrease also due to a drop in the
price of telecommunication stocks on the world market.
According to D&B experts, an important event this year was a free
trade agreement between Croatia and Hungary, signed after three
years of negotiations.
Croatia was given the credit rating mark DB4d for the first time in
early February, after its previous rating of DB5a, which marks
countries of high investment risk.
Croatia shares the same credit rating with Slovakia and Lithuania.
Countries in transition with the best credit rating, DB3a, which
marks countries of relatively low investment risk, are Hungary and
Slovenia.
(hina) rml