Croatia has achieved a record speed in increasing its credit rating, and by the end of next year, the economy can expect additional administrative relief worth 364 million euros through an additional 104 measures. These are the key messages from Zvonimir Savić, advisor to the Prime Minister for the economy, who particularly addressed the recent increase in Croatia’s credit rating by Standard & Poor’s (S&P) at the 16th Lider conference Day of Big Plans.
From speculative grade, colloquially referred to as ‘junk’, Croatia’s credit rating has reached the current level of A- in a record five and a half years, which no other country has achieved so far, Savić emphasized. The previous record holder was Portugal, which took a year longer for this feat.
– Since the pandemic, Croatia’s rating has been increased by two notches by Fitch and Moody’s, and by three notches by S&P – added the Prime Minister’s advisor. This rating agency highlighted in its rationale for the upgrade that Croatia is a ‘frontrunner’ when it comes to utilizing European funds for recovery and resilience. Savić reminded that there are 10 billion euros allocated for Croatia, of which 4.5 billion euros have been drawn so far, and 95 percent of that money will go directly or indirectly to the private sector. He particularly emphasized that we have a 100 percent success rate in implementing the reforms that are a prerequisite for the allocation of funds.
For this year, it is expected that our GDP growth will reach 3.5 percent, which is the second highest economic growth in Europe. This figure is particularly important in the context of Croatia’s development. Namely, back in 2016, Croatia was at 62 percent of the EU’s average development, and today it is at 78 percent. Next year we will reach 79 percent, claims Savić. Regarding the current tax reform, Savić did not want to say much since it is the topic of today’s Q&A session in the Croatian Parliament. However, he stated that in the previous rounds of tax reform since 2017, the total relief amounted to two billion euros. Of that, 770 million euros relates to VAT reduction, and 800 million euros to income tax reduction.
