"We are satisfied with the messages which the Fitch agency sends in its report. The agency has recognised the importance of our membership of the eurozone as well our achievements concerning political, econmic and financial stability, reduction of the public debt to GDP ratio and implementation of reforms under the National Recovery and Resilience Plan, which confirms the government's commitment to the implementation of reforms and enhancement of institutional capacities," Finance Minister Marko Primorac said in a statement in which the ministry reported about Fitch's decision.
Croatia's resilience to recent external shocks, its real GDP 16% higher than pre-pandemic level
Concerning Croatia's Positive Outlook the agency says that it "reflects Croatia's resilience to recent external shocks."
"High nominal GDP growth and prudent fiscal policy has led to a substantial reduction of public debt. (...) At end-2023, Croatian real GDP was almost 16% higher than the pre-pandemic level of 4Q19 and the country is expected to grow on average by 3.2% in 2024-2025 compared with 1.1% forecast for the eurozone," says the agency in its report.
As for the EU Funds Support Growth the agency says that "Croatia remains a front-runner in the absorption of EU Recovery and Resilience Facility (RRF) grants. Swift progress on RRF-linked reforms has led Croatia to receive EUR2.9 billion (3.5% of GDP), half of its total RRF grant allocation."
"Investments financed with the funds and structural reforms under the RRF could boost potential growth and further strengthen convergence with average EU income levels," says Fitch.
In his comment, Minister Primorac says that the fiscal policy will continue to be focused on the strengthening of fiscal sustainability, taking care of social inclusion and boosting the country's competitiveness and resilience of the economy.
We will pay a special attention to the permanent reduction of the public debt to GDP ratio, to be below the 60% of GDP reference value and we will focus on maintaining the budget gap below the reference value of 3% of GDP, said Primorac adding that this will create prerequisites for the further growth of Croatia's credit rating so that it could reach A level.