They said there was some relief at the 66 percent referendum "yes" vote, but it was already broadly priced in, and investors wanted to see a viable reform programme, possibly backed by a precautionary deal with the International Monetary Fund, said Reuters.

"Investors are likely to be ready to buy Croatia's debt this year as long as they see some form of more comprehensive reform program from the government - perhaps helped by an IMF program," Timothy Ash of the Royal Bank of Scotland was quoted as saying.

"Now, with the EU referendum successfully behind, it might be easier for the government to pursue necessary reforms," he added.

A pressing task for Prime Minister Zoran Milanovic is to draft a tight budget and avert a credit rating downgrade which would put it in the lowest, speculative investment grade, hike borrowing costs and complicate economic recovery, said Reuters.

Last year, Croatia's budget deficit exceeded five percent of gross domestic product, the highest level in eight years, the news agency said, adding that this year Croatia "tentatively sees the gap at around 3.5 percent of GDP and to cover it the government may combine issuing debt and selling non-strategic assets in the banking and insurance industry."

The government has already announced a hike in VAT from 23 to 25 percent, and a budget draft is expected to be ready by the time Fitch rating agency arrives to assess Croatia's economy on February 1-3, Reuters said, adding that Fitch rated Croatia BBB-, with a negative outlook, and that Moody's and Standard and Poor's ratings were due in the second half of February.

"I think our chances to rescue the rating are a touch above 50-50. There is political will, everyone has acknowledged that spending must be cut, but there is not a lot of time," the agency quoted Hrvoje Stojic, an analyst at Hypo Bank Alpe Adria, as saying.

He said Croatia could even post mild growth this year, despite a bleak outlook for the euro zone's economy, if it goes for "a radical overhaul of the business climate, spending cuts, tax and labor market reforms, public tenders, concessions." "But we just don't have experience with quick implementation," he added.

The World Bank has forecast a mild economic decline of up to one percent this year, Reuters said.

Raffaella Tenconi of Bank of America-Merrill Lynch was quoted as saying that a stand-by deal with the IMF would be very welcome although Croatia probably would not need to draw any money.

"I think they only need it as an insurance, I don't think they actually need the money. Their issuance needs (this year) are relatively low," she said.

The agency said parliament was likely to approve the 2012 budget in February or early March.