In the latest edition of the International Risk & Payment Review publication, which covers business risks in 132 countries worldwide, the world’s oldest credit rating agency, Dun & Bradstreet, has changed the trend from rising to falling, leaving the rating DB3d, which ranks Croatia at the very bottom of countries with low business risk.
There were no changes in the region’s ratings, but there were in Chile, Ecuador, Hong Kong, Iceland, Ireland, Nigeria, Šwitzerland, and Uganda. Political instability and increasing distrust in the government have resulted in a change in the rating trend. The coalition is losing support, while Prime Minister Jadranka Kosor’s popularity is declining despite not cutting salaries, pensions, and social benefits in the budget rebalancing. The decline in the Prime Minister’s popularity also complicates the management of the HDZ, which is no longer composed the same as in the last elections.
Meanwhile, GDP has recorded a decline for the sixth consecutive quarter. A total of 2.5% compared to the previous year. Along with the decline in GDP, there is also a decrease in investments and demand. To revive the economy, the government has put several investment projects into procedure that public companies should carry out. D&B is skeptical about the execution of these projects due to a lack of funds and bureaucratic obstacles. Additionally, the government has announced the sale of minority stakes in state-owned companies to bring the negotiations for EU accession to a close. Positively, the European Investment Bank will provide 200 million euros for infrastructure improvements before entering the EU, as stated in the announcement.
