Thursday, 14 July 2022

Fitch Upgrades Croatia's Rating Due To Eurozone Accession

ZAGREB, 14 July 2022 - Fitch Ratings on Wednesday upgraded Croatia's Long-Term Foreign-Currency Issuer Default Rating to 'BBB+ from 'BBB', with a stable outlook, after the European Council's Economic and Financial Affairs Council approved on 12 July Croatia's application to join the euro on 1 January 2023.

The next scheduled review date for Fitch's sovereign rating on Croatia will be 28 October "but Fitch believes that developments in the country warrant such a deviation from the calendar."

"Fitch believes that euro adoption is positive for the rating, as it would provide the sovereign with reserve-currency status, reduce transaction costs and limit exchange-rate risk to corporate and household balance sheets," the agency said.

Croatia joined the Exchange Rate Mechanism (ERMII) in July 2020 and "has fulfilled all convergence and reform criteria within the shortest possible timeframe."

According to Fitch, seven EU member states have a lower rating than Croatia - Italy, Portugal, Greece, Cyprus, Hungary, Bulgaria and Romania.

PM: New upgrade direct consequence of eurozone membership

Prime Minister Andrej Plenković said on Twitter the credit rating upgrade "is a direct consequence of membership of the eurozone, which brings Croatia greater security in the crisis."


For more, check out our politics section.

Saturday, 7 May 2022

Eurozone Entry Will Mean Additional Improvement of Credit Rating, Says FinMin

ZAGREB, 7 May 2022 - Finance Minister Zdravko Marić said on Saturday he was pleased with Fitch's latest credit rating of Croatia, adding that accession to the eurozone will mean that the rating will additionally improve.

Fitch Ratings yesterday reaffirmed Croatia's investment rating at BBB with a positive outlook, estimating that the recovery of the country's tourism industry will support the economy at a time of slowing exports and that eurozone entry will mitigate financing risks.

Speaking to the press, Marić said citizens, enterprises and the government could be satisfied because the credit rating was maintained.

A very positive assessment, a very welcome report in these circumstances which gives us an incentive to continue all that we are doing, with a very likely positive unfolding of events in the remainder of the year as regards Croatia's credit rating, he said.

Fitch revised down its projection of Croatian growth for 2022 from 4.4% to 3.3%, citing base effects, a sharp slowdown in household consumption as high inflation affects consumer spending, as well as the effects of Russia's aggression on Ukraine.

Marić said that was understandable given that about ten days ago the government revised down its GDP growth forecast for this year to 3%.

In the fiscal part, Fitch's report is in line with the government's efforts, achievements and projections, the minister said, underlining that last year the deficit was reduced much more than expected and that this trend would continue this and in the years ahead.

As for potential risks for the rating's trend, Fitch mentioned an increase of the government debt and a significant delay in Croatia's eurozone accession.

"I'm deeply confident that none of that will happen. Actually, I'm sure of that," said Marić.

He recalled that since 2016, the public debt-to-GDP ratio has been decreasing every year except in 2020. "That's one of the basic characteristics and traits of this government's fiscal policy and it will continue."

Speaking of Croatia's eurozone journey, Marić said convergence reports by the European Central Bank and the European Commission were expected early next month. He also mentioned the Maastricht criteria - exchange rate, price and interest rate stability, budget deficit and government debt.

Marić said the deficit and the government debt were the fiscal indicators which opened the prospect of introducing the euro to the greatest extent. "If we hadn't consolidated public finance and done all that we have... we would have waited much longer."

Inflation in April expected to accelerate further

Speaking of inflation, Marić said the data for April would likely show an additional acceleration of the average price rise rate, but without a significant deviation from the average.

In March, inflation in Croatia went up 7.3% and the government has forecast its growth for this year at 7.8%.

Under the Maastricht criteria, Croatia's inflation over the past year should not exceed 1.5 percentage points in relation to the average inflation in three EU member states with the lowest inflation.

Marić said there were clear signals that the lower inflation rates in some member states, for example Greece, would be treated as deviation variables and that Croatia would meet this criterion, too.

He reiterated that Croatia planned to enter the eurozone on 1 January 2023 and that the final decision was expected by the first half of July this year.

At the moment, the introduction of the euro has a virtually negligible impact on inflation, he said, reiterating that in the last seven states which introduced the euro, the inflationary effect in the first year was between 0.2 and 0.4 pp on average.

Reforms as prerequisite for tax relief

Marić was also asked about a reform package proposed by the Croatian Employers Association  which is aimed at raising the net pay and includes raising the non-taxable income and reducing pension and healthcare contributions as well as income tax.

In order to further reduce the tax burden on labour, it is necessary to create the prerequisites by reforming the pension system and especially healthcare, he said, adding that the basic intention of the government's tak reform has been to reduce the tax burden on labour and profit.

For more, check out our politics section.

Sunday, 23 May 2021

FinMin Says it's Very Good Fitch has Left Croatia in Investment Zone

ZAGREB, 23 May, 2021 - Finance Minister Zdravko Marić said on Sunday it was very good for Croatia that Fitch had affirmed its investment rating.

Fitch Ratings on Friday affirmed Croatia's rating at 'BBB-', with a stable outlook, highlighting big short-term risks related to the pandemic as well as the medium-term outlook for economic growth thanks to the EU's financial support.

Fitch also upgraded the projection for Croatia's economic growth in 2021 from 3.8% to 5.5%, forecasting GDP growth to accelerate to 6.1% in 2022.

"That's very good news, that according to the Fitch credit agency too Croatia's credit rating continues to be in the investment zone with a stable outlook," Marić told the press.

He said he was pleased that Fitch's report summed up objectively and well all the key circumstances that impacted the rating.

The agency's emphasis is on the process of joining the Economic and Monetary Union, he added.

"The report says what introducing the euro means for the credit rating. It would mean a jump of two notches up, which would bring us into a comfort zone. On the other hand, there's the National Recovery and Resilience Plan," Marić said, adding that emphasis was put on its implementation, which he expects to begin towards the end of the year.

Public finance is the third segment and it's good that rating agencies underline that in this crisis fiscal stimulants should last as long as necessary so as to save jobs and people's health, he said.

"When the pandemic is behind us, we will sum up the effects. When you look at it all together, the deficits, notably on the public debts of the EU member states, including Croatia, the debts are not small."

He said the effect of one year of the pandemic in Croatia had neutralised the four years when the public debt was being reduced, by about three percentage points every year.

Last year Croatia's public debt grew to over HRK 36 billion, mainly because of the costs of fighting the pandemic.

Fitch raised the public deficit forecast from 3.5 to 4% of GDP in 2021 and forecasts a fall to 3% in 2022, up by 0.8 percentage points from the forecast made last December. Public debt/GDP should fall to 82.7% of GDP in 2022 from 88.7% in 2020, Fitch said, forecasting Croatia's eurozone entry for 2024.

COVID aid for businesses in line with circumstances, trends

Asked if aid for businesses affected by the pandemic would continue after June, Marić said the measures were adopted in line with the circumstances and that trends both in Croatia and abroad were being followed.

Speaking of aid for travel agencies, the event industry and occasional transport, Marić said the coverage of fixed costs in force since December would be applied.

For those that are closed, other solutions are being sought and the relevant ministries are working on programmes to help them, he said, adding that the idea was to give them some incentive once the summer tourist season started.

Asked about reforms related to the National Recovery and Resilience Plan, notably in health, Marić said the Plan referred to the period until 2026 and that he hoped Croatia would be prompt and efficient in implementing it. He expects 13% of the advance to be drawn by the end of this year.

Speaking of budget revenues, Marić said they were as expected at the moment and that some tax revenues were very good.

Fiscalisation is at 99%, one percent less than at the same time in 2019, he said, adding that the indices in retail were over 100%, with some categories recording growth from five to eight percent.

Tourism and hospitality are markedly below and the key topic at the moment is expenditures, he said.

Asked about this year's possible inflation rate, Marić said that last year it was 0.1% and that some inflationary pressure could be expected, both globally and in Croatia, adding that in Croatia inflation had always been within sustainable levels.

Commenting on an economist's proposal to use European funds for new tax cuts in all segments instead of projects, Marić said the rules were set by the European Commission.

For more about business in Croatia, follow TCN's dedicated page.

For more news about Croatia, CLICK HERE.

Saturday, 22 May 2021

PM Says Satisfied with Fitch Rating, Gov't Working on Creating Conditions for Growth

ZAGREB, 22 May 2021 - PM Andrej Plenković on Saturday expressed satisfaction with Fitch rating agency's having maintained Croatia's rating at BBB- with a stable outlook, saying his government was working to create conditions for economic growth so that this and next year its growth rate could be among the highest in the EU.

Fitch Ratings on Friday affirmed Croatia's rating at 'BBB-', with a stable outlook, saying that pressure on state finance linked to the pandemic should be neutralised by economic recovery on the back of tourism and EU support.

"We are very happy. The... rating confirms what we have been doing in the past 15 months," Plenković told reporters while visiting Crikvenica and Rijeka in Primorje-Gorski Kotar County, where he met with candidates of the local branches of his HDZ party ahead of the second round of local elections set for 30 May.

Plenković stressed that Fitch had sent a message that Croatia had maintained political stability.

"We had parliamentary elections last year, we quickly formed the government, continued working, fought against the pandemic while at the same time keeping the stability of public finances," he said, adding that owing to public finance stability it was possible to secure funding for healthcare, wages, pensions, and job-keeping support.

"The coronavirus crisis has cost us so far HRK 32 billion, the damage caused by the earthquakes in Banovina and Zagreb amounts to HRK 125 billion. But despite that, we have managed to make sure everyone continues receiving their wages, we have secured job-keeping support in the amount of HRK 10.5 billion, 680,000 workers have received wages owing to the government's political decision to compensate employers for their workers' wages, and we have introduced measures for shorter working hours, various forms of support for liquidity in numerous sectors, and the coverage of fixed costs," he said.

"With a timely entry into the domestic capital market and access to international sources of financing, clever agreements with the Croatian National Bank and the European Central Bank, we have managed to maintain our reputation with credit agencies and all international institutions," he said, adding that apart from functioning normally and heading towards the euro area, Croatia was also in the European Exchange Rate Mechanism II.

"A budget revision will be on the agenda soon, in early June, and we will try to maintain, this year as well, the framework that will make it possible for our growth in 2021 and particularly in 2022 to be among the highest in the EU," said Plenković.

For more about business in Croatia, follow TCN's dedicated page.

He put this in the context of vaccination against COVID-19, calling on Croatians to get vaccinated.

Plenković believes that as regards reputation, Croatia has a very stable position and that with vaccination it is also creating conditions for an excellent tourist season, which, he says, together with the green digital certificate and the pandemic subsiding, will enable economic growth.

"Croatia is on the right track and I am encouraged by the assessment of those who have an unbiased and very precise judgment of our performance in the current crisis, it is very encouraging in my opinion," said Plenković.

In its latest rating, Fitch has upgraded the projection for Croatia's economic growth in 2021 from 3.8% to 5.5%.

Fitch forecasts GDP growth to accelerate to 6.1% in 2022 before averaging 4% in 2023-25, driven largely by investment and notes that Croatia will receive around €6.3 billion in grants from the Recovery and Resilience Facility, in addition to €1 billion from the EU Solidarity Fund for earthquake reconstruction and €12.6 billion in the 2021-27 Multi-Annual Funding Facility.

Saturday, 22 May 2021

Fitch Affirms Croatia at 'BBB-', Outlook Stable

ZAGREB, 22 May 2021 - Fitch Ratings on Friday affirmed Croatia's rating at 'BBB-', with a stable outlook, saying that pressure on state finance linked to the pandemic should be neutralised by economic recovery on the back of tourism and EU support.

The 'BBB-' rating balances strong structural features, the agency says, singling out better indicators of human development and governance in comparison with countries with a similar rating and higher GDP per capita.

The rating is restricted by a high public debt and periods of weak economic growth, in part due to the slow adoption of structural reforms.

The stable outlook "weighs large short-term downside risks related to pandemic developments against stronger medium-term growth prospects linked to substantial EU fund support and our fiscal consolidation and debt reduction baseline that is underpinned by the authorities' commitment to fulfilling convergence criteria under the Exchange Rate Mechanism (ERMII)."

"Fitch expects the economy to expand by 5.5% in 2021, from a combination of base effects (growth was stronger than expected in 2H20), the resilience of sectors such as construction and goods exports, and a gradual recovery in consumption," the agency says.

"Our forecasts rest on an improved tourism sector outlook (at around two-thirds of 2019 levels), assuming a pick-up in summer tourism as the health crisis in Europe continues to abate. However, renewed travel restrictions due to the still uncertain evolution of the pandemic, including the spread of new variants, cannot be discounted."

European support

Fitch expects the economy to grow this year, "even if tourism levels remained at 2020 levels (50% of 2019), but the weaker recovery could increase the risk of longer-term scarring and put pressure on public and external finances."

Fitch forecasts GDP growth to accelerate to 6.1% in 2022 before averaging 4% in 2023-25, driven largely by investment and notes that Croatia will receive around €6.3 billion in grants from the Recovery and Resilience Facility (RRF), in addition to €1 billion from the EU Solidarity Fund for earthquake reconstruction and €12.6 billion in the 2021-27 Multi-Annual Funding Facility.

Work force problem

According to those projections, Croatia will likely reach pre-crisis output in early 2022, "limiting the risks of labour market hysteresis and corporate sector bankruptcies."

Rapid labour tightening in sectors such as construction could delay some of the investment momentum, as could the need to pass a large number of reforms, in a short timeframe in order to get RRF fund disbursement.  

"Croatia's absorption capacity lags the EU average and the sheer size of funds accentuates the implementation challenges."

"If the authorities are successful at adopting long-standing reforms, this could mitigate major growth challenges such as adverse demographics. According to the EU Commission, the working age population could contract by 26% by 2050."

Deficit forecast raised

Fitch raised the public deficit forecast from 3.5 to 4% of GDP in 2021 and forecasts a fall to 3% in 2022, up by 0.8 percentage points from the forecast made last December.

"The authorities put in place relatively generous and effective pandemic support measures that are gradually being wound down, with very limited direct budget costs expected beyond 2Q21."

That will help bring public spending/GDP down from a record 55.4% of GDP in 2020, while revenue should benefit from strong nominal growth, but recovery in certain segments could be jeopardised if tourism activity disappoints.

Eurozone entry in 2024

Public debt/GDP should fall to 82.7% of GDP in 2022 from 88.7% in 2020, Fitch said, reducing the forecast from December by 2.8 percentage points.

Croatia benefits from favourable financing conditions and deposits, reducing liquidity pressures.

"Over 75% of public debt is foreign currency-denominated (almost all in euros), but there are few concerns about exchange rate stability and this long-standing vulnerability will dissipate once Croatia joins the eurozone."

The authorities continue to target euro adoption by early 2023, but the biggest challenge remains fulfilling the public finance convergence criteria targets, as the government deficit and debt reduction strategy could face challenges in the near term if macroeconomic conditions do not improve as expected.

Fitch maintains its forecast that Croatia should enter the eurozone in 2024.


The agency says that it could upgrade Croatia's rating if near-term macroeconomic risks dissipate and if criteria are met and eurozone accession goes as planned. A stable reduction of the public debt and budget deficit through budget consolidation would also have a favourable effect.

The rating could be downgraded in case of failure to reduce general government debt over the medium term, "for example due to a more pronounced and longer period of fiscal loosening and economic contraction," as well as in case of deterioration in macroeconomic prospects, for example through a setback to the tourism sector.

For more about business in Croatia, follow TCN's dedicated page.

Thursday, 2 April 2020

How is Coronavirus Affecting Croatia's Rating? 5% GDP Drop Expected

The economic consequences of the coronavirus outbreak are potentially dire, and we're already seeing the negative effects the virus is having on the labour market, stock markets, and much more. With many Croatian companies having to deal with the brand new and utterly unexpected reality of not knowing whether or not they'll even exist in three months, these are truly nail biting times.

As Frenki Lausic/Novac writes on the 2nd of April, 2020, in a new rating, the Fitch credit rating agency left the Republic of Croatia's main rating at BBB minus, which is encouragingly still at investment level, but lowered its outlook from positive to a mere stable.

The aforementioned agency predicts, due to the crisis caused by the spread of coronavirus and the stringent restriction measures that have been put in place to try to combat it, that Croatia's GDP will drop by a significant 5.5 percent in 2020, instead of experiencing the previously projected growth of 2.9 percent.

"Croatia is highly dependent on tourism and activities related to tourism, which together account for 25 percent of the country's GDP. Croatia has taken measures to mitigate the coronavirus crisis, which will amount to 7.5 percent of GDP, but additional measures can be expected,'' stated Fitch, referencing a report that made this assessment before the Croatian Government adopted a second package of coronavirus measures.

In the baseline scenario, the agency expects a rapid recovery in the second half of the year and even economy growth of three percent in 2021, and an average growth of 2.2 percent in the coming years.

The Republic of Croatia's state budget deficit is also projected to grow to five percent in 2020, instead of the projected surplus of 0.2 percent so far, and a rise in public debt to 77.7 percent of GDP, instead of the previously expected 68.1 percent, is also now expected.

Make sure to follow our dedicated section for rolling information and updates on coronavirus in Croatia.

Sunday, 9 June 2019

Finance Minister Delighted with Fitch’s Credit Rating Upgrade

ZAGREB, June 9, 2019 - Finance Minister Zdravko Marić said that Fitch's decision to raise Croatia’s credit rating was very good news and that he hoped Croatia would never again fall below the investment-grade level.

"We can all be satisfied, both the Republic of Croatia and all its citizens, entrepreneurs, taxpayers. It's more good news from international financial circles. Fitch is the second credit rating agency which, after many years, has restored Croatia's credit rating to the zone it belongs, the investment credit rating zone," Marić told reporters.

Fitch Ratings on Friday upgraded Croatia's long-term foreign-currency issuer default rating to BBB- from BB+ with a positive outlook.

Marić said it was necessary to see to it that Croatia did not fall below the investment-grade level ever again because "we know well what the sub-investment zone meant and what effects it had also on the cost of debt and capital."

Marić said he was very pleased and proud that the results in the fiscal policy had been recognised again, noting that they were one of the main reasons for the credit rating upgrade.

Certain risks, such as the ailing Uljanik shipyard, have been recognised too but we have adequately addressed all those risks, he said, noting that Croatia has been recording a budget surplus for two and a public debt reduction for three years in a row.

Marić said he was pleased the Fitch report recognised the idea of introducing the euro and the good macroeconomic indicators.

That's positive news which suggests that Fitch is saying very clearly that the rating can be even better if we continue to deliver results, notably in public finance, macroeconomy and euro introduction, he added.

He noted, however, that one must not turn a blind eye to the things Fitch indicated could be challenges, such as the enterprise and business climate, the state and the public administration, notably public companies and their corporate management, the energy sector and healthcare.

If we want completely sustainable public finances, and we do, we must deliver additional results in those areas, said Marić.

Asked if now was the right time to issue an international bond, he said he would say everything when the time came. He recalled that two bonds were due for refinancing this year, one of 1.5 billion dollars on the international market and one of 1 billion euro on the domestic market.

We are making preparations, always looking two steps ahead, following the situation on the markets, and we believe this will be a positive incentive both on financial markets and the price and yield of our bonds, said Marić.

He noted that a credit score upgrade was always related to the cost of debt and capital, not just the cost paid by taxpayers from the state budget, but the cost paid by all entrepreneurs and each citizen.

We are carefully preparing everything and will choose the right time. This will be another year in which we will record a significant decrease of the total interest cost, Marić said, adding that the amount paid on interest was reduced by almost 3 billion kuna in three years, to 9 billion kuna.

More news about Croatia’s credit rating can be found in the Business section.

Saturday, 8 June 2019

Fitch Raises Croatia’s Credit Rating to Investment Level

ZAGREB, June 8, 2019 - Fitch Ratings raised Croatia’s credit rating to investment-grade level on Friday, by one notch to BBB-, with a positive outlook, from BB+.

"Croatia outperformed its budget target for the third year in a row in 2018, with the general government posting a surplus of 0.2% of GDP... despite the materialisation of contingent liabilities from troubled shipyard company Uljanik," the agency said.

"Fiscal developments have been underpinned by expenditure restraint, increased revenue... lower interest costs and favourable macro conditions," it added.

"Croatia's structural features are generally more favourable than 'BBB' peers. GDP per capita is 30% above the 'BBB' median and the country scores better than peers in governance indicators and human development, thanks in part to EU membership," said Fitch.

"The coalition government, installed in June 2017, has been able to implement its agenda relatively smoothly despite its small majority," it added.

"Croatia continues to face important structural challenges that limit medium-term growth to 2%. These include shortcomings in the business environment, a complex public sector framework, weak corporate governance, still high corporate debt and legacy issues in key sectors such as energy and healthcare," Fitch said.

"Limited progress has been achieved in tackling these issues in recent years, but there is some scope for improvement as potential prior actions for joining ERM2," it added. "Croatia benefits from low and stable inflation... The banking sector has maintained solid levels of capitalisation."

The positive outlook signals that Fitch could raise Croatia's rating again in a year or two.

Until now Fitch kept Croatia's credit score in the speculative category at BB+ with a positive outlook.

The latest rating followed after Moody's upheld Croatia's Ba2 speculative credit rating in late April, upgrading the outlook from stable to positive as a result of improved fiscal metrics and reforms the agency believes will have a positive impact on the economic growth outlook.

In March, Standard&Poor's raised Croatia's rating to BBB-/A+, including it in the investment category after more than six years thanks to an improved budget situation and economic recovery.

More news about Croatia’s credit rating can be found in the Business section.

Saturday, 8 December 2018

Fitch Affirms Croatia's Credit Rating at BB+, Outlook Positive

ZAGREB, December 8, 2018 - Fitch Ratings has affirmed Croatia's long-term foreign-currency Issuer Default Rating (IDR) at 'BB+' and maintained the country's outlook positive, saying that Croatia's credit rating is balanced by strong structural features, including human development and governance indicators and high GDP per capita, with weak growth potential, high public sector debt and external vulnerabilities.

The positive outlook reflects Fitch's expectation that the combination of persistent primary budget surpluses, low interest and healthy GDP growth will contribute to a continued marked reduction in gross general government debt.

In addition, Fitch expects Croatia to outperform its budget target for the third consecutive year in 2018, with a deficit forecast of 0.2% of GDP, compared with the government's deficit target of 0.5%. "Croatia's fiscal performance continues to benefit from strong revenue growth and expenditure restraint," Fitch said.

"This outperformance is despite the materialisation of contingent liabilities stemming from troubled shipyard company Uljanik, which we expect to amount to approximately 0.6% of GDP for this year," the rating agency said.

Fitch also forecasts the general government budget will remain broadly balanced in 2019-20, against the small deficits projected by the authorities. "Positive fiscal dynamics are underpinned by favourable nominal growth, the government's commitment to meeting its expenditure rules as well as the incentive of joining the eurozone," Fitch said.

The agency also forecasts general government debt/GDP to fall to 74.1% of GDP at end-2018, down from 84% at end-2014, and to 68.3% by 2020 and 61.9% by 2023 on the back of primary surpluses. "This would still be well above the historical 'BB' median of 38.3% of GDP," Fitch said.

External deleveraging continues at a rapid pace, supported by surpluses in the balance of payments.

Fitch forecasts the current account to post an average surplus of 2.3% of GDP in 2018-20, as services exports led by tourism and current transfers remain robust, offsetting a slowdown in tradable exports. This will support a build-up of foreign reserves and further strengthen the sovereign's net external creditor position, helping to limit external vulnerabilities.

The economy is set to maintain a moderate rate of expansion, averaging 2.5% in 2018-20, supported by private consumption growth and price/exchange rate stability.

The report also notes that medium-term economic prospects are limited by adverse demographic trends and structural weaknesses, with potential growth estimated at around 2%.

The main downside risks include a sharper-than-expected slowdown in GDP growth in key European markets and/or a slowdown in tourist inflows given the importance of the sector for growth, employment and external finances.

The banking sector remains stable with ample liquidity and capital levels well above the regulatory minimum (22.6% 3Q18). "Unlike the Agrokor fallout in 2017, banks have felt no impact from the troubles at Uljanik," Fitch said in its report, adding that profitability is set to increase only modestly, as aggregate credit demand remains muted.

The report also says that Croatia's structural features are much stronger than 'BB' peers. "GDP per capita is 60% above the 'BB' median and the country scores better than 'BB' and 'BBB' peers in terms of governance indicators and human development, thanks in part to EU membership. The coalition government, installed in June 2017, has been able to implement its agenda relatively smoothly despite its small majority," Fitch said in the report.

For more on Croatia’s credit rating, click here.

Sunday, 8 July 2018

Prime Minister Encouraged by Credit Rating Outlook Improvement

ZAGREB, July 8, 2018 - Croatian Prime Minister Andrej Plenković said on Saturday that the latest report by the rating agency Fitch was "very encouraging" and that it recognised Croatia's efforts.

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