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."
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