The credit rating agency Dun & Bradstreet (D&B) has maintained Croatia’s credit rating at DB3D in its June report, but the rating trend has changed from "stable" to "improved," and the new government economic program has been assessed as a positive move for exiting the crisis.
Croatia’s rating remains unchanged at DB3d (slight business risk), but the trend has changed from "stable" to "improved" after a long time, which means that if this trend continues for a certain period, a higher rating can be expected, D&B states in the report relayed by the Zagreb agency Bonline. D&B analysts note that the Croatian government, for the first time since the onset of the global economic and financial crisis, has presented a comprehensive recovery economic program that encompasses short-term and long-term priorities for exiting the crisis. The program includes intensifying privatization, reducing tax and non-tax burdens on companies, strengthening liquidity through more timely payments by public enterprises, rationalizing taxes, and increasing the efficiency of the public sector, including a five percent reduction in the number of employees, the report states.
Although, in D&B’s opinion, the recovery plan is not detailed enough, analysts from the credit rating agency highlight specific measures they assess positively, which include the abolition of two rates of crisis tax, changes to income tax rates, non-payment of bonuses to employees in public enterprises, reduction of payment deadlines for public enterprises, and the announcement of the creation of a register of employees in the public sector. According to D&B data, payment deadlines for Croatian companies to foreign companies have been significantly shortened since the beginning of 2010, which can be partly attributed to faster payments by public enterprises. Looking long-term, the report states, the state aims to limit early retirement as retirees represent a significant fiscal burden.
