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D&B: Short-term economic outlook for Croatia not positive

ZAGREB, April 27 (Hina) - The Dun&Bradstreet (D&B) credit rating agency expects Croatia's GDP growth rate of 1% in 2015 and unemployment rate of 18%, saying that although the short-term economic outlook for the country does not look positive, there are reasons for optimism thanks to a mild GDP rise at the end of 2014 and growing consumption.

The rating agency says in its monthly report, carried by the Zagreb firm Bonline on Monday, that Croatia's GDP grew in the last quarter of 2014 for the first time after declining for 12 consecutive quarters, driven by a 4.5% increase in exports.

D&B said that the other upsides were increases in consumer confidence and consumption in January and February 2015, as well as a drop in oil prices, which should increase household liquidity and investment.

The GDP growth outlook is not optimistic because of the current situation in the euro area, and all growth components are currently on the decline: private consumption by 6.6%, government consumption by 0.5% and investment by 3.7%, the agency said.

For this reason D&B maintained its DB3d rating for Croatia, which puts it among countries with a mild business risk. Compared with other countries in the region, Slovenia and Croatia have the highest rating of DB3d, followed by Macedonia (DB4a), Albania (DB4c), Serbia (DB5a) and Bosnia and Herzegovina (DB6b).

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