Croatia In No Rush for Foreign Bond Sale After Upgrades, PM Says

(Bloomberg) - Croatia has no plans to accelerate its bond sales on international markets despite recent improvement in credit ratings, according to Prime Minister Andrej Plenkovic.

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"At the moment, we are fine," Plenkovic said in an interview with Bloomberg TV late Friday, responding to a question about plans to capitalize on the slew of rating upgrades. "Our needs in terms of refinancing are continually refreshed."

Plenkovic's remarks mean European Union and euro-area member is unlikely to return to international bond markets before the end of this year.

Croatia in recent weeks saw its sovereign-debt credit ratings upgraded to A- by Standard & Poor's and Fitch Ratings, with positive and stable outlooks, respectively.

That's the highest ratings level in the history of the Balkan nation of 3.9 million people. Both ratings agencies cited a positive economic outlook, fiscal consolidation, reduced public debt levels and political stability as reasons for the upgrades.

The improved ratings will have an "immediate effect on our banking sector, on loans for citizens, and on the entire economic perception of Croatia," Plenkovic said.

Croatia's economy is expected to grow by 3.5% this year, and annual inflation is seen curbed at about 3%, according to the premier. Public debt levels are expected to fall under 60% of gross domestic product by year's end, according to Plenkovic, who earlier this year won his third consecutive mandate at the helm of center-right Croatian Democratic Union.

Still, the government remains vigilant.

"We are very watchful and careful about what happens with our major trading partners, especially Germany and Austria," Plenkovic said. "With a very good tourist season it seems that 2024 will be an economically excellent year for Croatia," but "the diversification of the export market is also important."

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