Moody’s revises Croatia to stable

Moody's Investors Service said it changed Croatia's outlook to stable from negative and affirmed its Ba2 senior unsecured bond and Ba2 long-term issuer ratings.

Moody’s said the key drivers for changing the outlook to stable and affirming the Ba2 rating are: (a) Croatia's stronger than expected medium-term economic growth following its emergence from a six-year recession in 2015, with growth of around 2.5% on average in coming years; (b) the reversal in the upward trajectory of Croatia's public sector debt burden as a result of improved growth; (c) in spite of these positive economic and fiscal trends, the rating continues to be constrained at the Ba2 level by structural weaknesses in Croatia's economy in the absence of a structural reform agenda.

Croatia's long-term and short-term foreign-currency bond ceilings are unchanged at Baa3/P-3, the long-term foreign-currency deposit ceiling remain unchanged at Ba3. The short-term foreign-currency deposit ceiling remains at Not Prime (NP) and the local-currency bond and deposit country ceilings are unchanged at Baa1.

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