A firmly declining debt trajectory and favourable medium-term growth prospects drive the Outlook revision. Low economic diversification and adverse demographic trends are the main credit constraints.

Euro area membership since 2023, favourable public debt trajectory and sound structural reform momentum support the ratings. High public debt levels, modest growth potential and limited economic diversification remain rating challenges.

Euro area accession from 1 January 2023 drives the upgrade. Credit challenges are high public debt, modest potential growth and external vulnerabilities.

Substantial euro-area accession reforms drive the Outlook change. Elevated public debt, external vulnerabilities, and low growth potential remain credit challenges.

Improvements in Croatia’s fiscal performance and budgetary framework alongside strengthened external buffers drive the upgrade. High public debt and foreign-currency exposure, low potential growth and institutional weaknesses remain constraints.