Croatia will seek to capitalise on rating upgrade

Significance Both agencies cited strong economic growth, fiscal discipline, political stability and strengthened institutions as key factors behind their decision. With a speculative grade rating just five years ago, Croatia has made remarkable progress, surpassing the likes of Hungary, Bulgaria and Italy. Impacts The upgrade will boost investor confidence in Croatia and attract more foreign direct investments. The rating upgrade will make Croatia less vulnerable to financial market shocks and reduce the risks of asset sell-offs. Companies in Croatia will benefit from lower borrowing costs and improved financing conditions. Banks holding Croatian government bonds may see improvements in collateral value and asset quality.