Croatia’s credit rating upgraded to ‘A’ by Standard & Poor’s

Zagreb

Croatia has received another major vote of confidence from global financial markets after Standard & Poor’s (S&P) raised the country’s long-term sovereign credit rating from A- to A, with a stable outlook.

The upgrade marks another milestone for Croatia’s economic progress and comes shortly after a positive assessment by Fitch Ratings, meaning two of the world’s three leading credit rating agencies have recently confirmed strong confidence in the country’s political and economic stability, the government stated.

In its latest report, S&P highlighted political continuity and stability as a key factor supporting Croatia’s positive outlook. The agency noted that the parliamentary majority led by the Croatian Democratic Union (HDZ) provides a stable framework for continuing reforms.

S&P also pointed to ongoing structural reforms and investment programmes, particularly those financed through the EU’s Recovery and Resilience Facility, as important drivers of future economic growth.

Another factor strengthening Croatia’s long-term prospects is its expected accession to the Organisation for Economic Co-operation and Development (OECD), which the agency said will further enhance institutional and economic resilience.

S&P forecasts average GDP growth of 2.7% annually between 2026 and 2029, reflecting continued investment, EU funding and stable domestic demand.

The rating upgrade also reflects responsible management of public finances, with Croatia expected to:

• Maintain the budget deficit below 3% of GDP

• Reduce public debt to around 56% of GDP

This fiscal discipline is expected to continue despite increased spending on defence, wages, pensions, social benefits and investment programmes.

Six-Level Credit Rating Improvement

Prime Minister Andrej Plenković welcomed the upgrade, describing it as a clear confirmation of Croatia’s economic progress.

He noted that when his government took office in 2016, Croatia was below investment grade, meaning there were doubts about its ability to meet financial obligations.

Since then, Croatia has improved its credit rating by six levels, reaching what S&P classifies as a “high quality” A rating.

“This upgrade, despite ongoing global crises, sends a strong message of confidence and confirms the significant progress Croatia has achieved,” Plenković said.

One of the Fastest Rating Improvements Globally

Croatia first returned to investment grade in March 2019, when S&P raised its rating from BB+ to BBB-.

In just seven years, the country has moved from non-investment grade to an A rating, making it the only country in the world to achieve such a rapid improvement in that period, according to S&P data.

Croatia Compared with Other EU Countries

The latest rating places Croatia alongside Latvia and Lithuania, both of which also hold A ratings from S&P.

The agency noted that 10 European Union countries now have the same or lower rating than Croatia, including:

• Italy

• Greece

• Malta

• Poland

• Bulgaria

• Cyprus

• Hungary

• Romania

Latvia and Lithuania joined the EU nearly a decade earlier than Croatia, highlighting the country’s rapid economic progress since becoming a member in 2013.

Outlook

With stable growth forecasts, continued reforms and strong fiscal management, the latest upgrade reinforces Croatia’s position as an increasingly reliable and attractive destination for international investors.

The improved rating is also expected to lower borrowing costs, support further investment and help Croatia continue closing the development gap with more advanced EU economies.