Ratings agency Fitch Ratings affirmed Croatia’s sovereign credit rating at ‘A-’ with a stable outlook, citing a credible economic policy framework supported by membership in the European Union and the euro zone, strong economic growth and improved fiscal discipline.
In a statement released on Friday, Fitch said the country’s fiscal performance in recent years had helped significantly reduce the ratio of public debt to gross domestic product (GDP).
The agency noted that Croatia’s strengths are balanced by lower GDP per capita and weaker institutional capacity compared with countries that share the same rating, as well as the relatively small size of its economy, which makes it more vulnerable to external shocks.
“The stable outlook reflects expectations that the public debt-to-GDP ratio will stabilise in the medium term, despite projections of wider fiscal deficits,” Fitch said.
Croatia’s real GDP growth slowed to 3.2% in 2025, down from 3.8% in 2024, but remained well above the euro zone average of about 1.5% and the median growth of similarly rated economies, Fitch added.
The agency expects economic growth to moderate to around 2.7% by 2027, still higher than the projected euro zone growth of about 1.2%, as domestic demand softens while net exports gradually improve.
Fitch also warned that Croatia’s price competitiveness abroad has weakened, particularly in tourism, as accommodation and restaurant prices move closer to the EU average. This has contributed to a decline in services exports.
Trade uncertainty linked to potential U.S. tariffs could also pose risks, although Croatia’s direct exposure to trade with the United States remains limited, the agency said.
Croatia has also been among the more successful EU members in using funds from the Recovery and Resilience Facility, Fitch said. By December 2025 the country had received 6.4 billion euros, or about 64% of its allocated funds, and is on track to use the remaining resources by the end of 2026.
On public finances, Fitch estimated Croatia’s fiscal deficit widened to 2.5% of GDP in 2025, from 1.9% in 2024, reflecting higher public-sector wages, strong capital investment and increased social spending.
Public debt declined to 56.3% of GDP in 2025, down from 57.4% a year earlier, roughly in line with the average for countries with an ‘A’ rating and about 30 percentage points below its pandemic peak in 2020, the agency said.
Inflation rose slightly to 4.4% in 2025 from 4% in 2024, driven mainly by higher energy and food prices, but Fitch expects inflation to gradually fall to about 2.8% by 2027 as domestic demand eases and prices in tourism stabilise.