INVESTMENT: Is Croatia Truly Open for Business?
The credit rating agency Moody’s recently changed Croatia’s outlook from negative to stable and affirmed the country’s Ba2 senior unsecured bond and Ba2 long-term issuer rating. This outlook shift came on the heels of a stronger than expected medium-term economic growth, as well as a slowdown of the country’s public-sector debt. According to Moody’s, Croatia’s economy is forecast to grow by 2.5% annually on average over the next few years, which is a lower growth than the pre-crisis average of 4.5% between 2000 and 2007, but is only slightly weaker than the average 2.8% expected for the country’s Central and Eastern European peers over the same period.
Moody’s latest rating coincided with Croatia successfully placing €1.25 billion in 10-year bonds on the international market at a lower than expected yield of 3.19% and a coupon of 3%. According to Croatia’s Finance Ministry, due to strong investor interest, the yield was the lowest seen by Croatia since the country began issuing bonds on international capital markets. Riding this wave of positive projections, this past week, Croatia’s Prime Minister (PM) Andrej Plenkovic (HDZ) spoke about the need to make the country more attractive and business-friendly for entrepreneurs and investors. The question is, though, how truly open to investment is Croatia?
Prime Minister Plenkovic was speaking at a conference, organised by the Croatian Chamber of Economy (HGK) on 14 March 2017, examining Croatia’s business climate and how to make the sector more effective. Plenkovic said Croatia had made significant strides in the past year, largely due to the policies of the current Government, which is focused on political stability and predictability, and is very much pro-EU. According to the PM, his Government is working on a national reform programme, aimed at making the state administration more effective. One of these measures of effectiveness will include consolidating the inspection units into just one unit, as opposed to the current 50 separately managed by their corresponding responsible ministry…