D&B increased Croatia's rating by one-fourth, to DB3d, which was the third increase this year. The first occurred in February, for the first time in five years, when the rating was upgraded from DB4d to DB4c, and the second in June, when the rating became DB4a. The DB4 rating stood for moderate investment risk.
Now Croatia is in the same group as Poland, Brazil and Namibia, and is ahead of Bulgaria.
D&B said the rating was upgraded due to continued progress in reforms in key areas such as fiscal consolidation, monetary policy, financial sector control, and deep structural reforms in reducing the state's role in the economy.
D&B said in its December report that the International Monetary Fund had been quite positive about the growth of macroeconomic stability and GDP in Croatia.
The report noted that inflation had been kept in check in recent years, assessed fiscal consolidation as impressive, and said that since 2004 the government had reduced the fiscal deficit, improved transparence and budgetary financing, and reduced quasifiscal activities.
The report went on to say that measures had been taken to improve the sustainability of the pension and health systems, and that financial sector supervision had been reinforced.
D&B said the IMF did not give a positive assessment to the new law on privatisation, which introduces employee stock ownership plans.
Although it is aimed at reducing the state's role in the economy, the IMF feels the new law could limit potential strategic investors and strengthen the internal control of entrepreneurs, thus undermining the company management system and limiting new investments.
However, given that many Croatian citizens are not convinced of the benefits of privatisation, D&B considers this law politically sensible, read the report.
Among the 25 countries of the region, Croatia moved up to number eight, alongside Poland.
The Czech Republic, Latvia and Lithuania are ahead of Croatia, with the rating DB3a, while Bulgaria and Romania are behind with the ratings DB4a and DB4b respectively.
Slovenia is at the top of the list, with the rating DB2b, which refers to low investment risk, while Belarus, Turkmenistan and Uzbekistan are at the bottom with the rating DB6d, which denotes very high investment risk.