Dun&Bradstreet (D&B), an international provider of credit information and credit reports covering over 130 countries, again assigned DB3d country risk indicator to Croatia, which puts it among the countries with slight risk and with stable ratings trends. (D&B), an international provider of credit information and credit reports covering over 130 countries, again assigned DB3d country risk indicator to Croatia, which puts it among the countries with slight risk and with stable ratings trends.
According to the D&B latest proprietary payments performance data,, which was carried out by the Zagreb-based Bonline company on Wednesday, 23.5 percent of payment arrived 30 or more days over terms in the year to end Q4 2009.
Some 65 percent of payments were paid promptly in the same period, while8.9 percent of payments were paid 60 or more days over terms.
The data showed that 2.2 percent of payments were severely delinquent with delays of 120 days or longer.
The loan crisis and a reduced profitability of company make payments to foreign partners more difficult for Croatian companies, D&B warned.
"With Croatia's economy having contracted sharply in 2009 (we estimate that GDP fell by 5.7 % in real terms while industrial production fell by an average of 9.3 %) there are few signs of a sustained recovery for the economy in the early part of 2010," the report said.
The report said that industrial output has continued to languish, with production down 5.5 percent in the first two months of the year, adding that both external and domestic demand remains weak.
Croatian companies continue to be reluctant to restock after the unprecedented inventory rundown experienced in 2009, the report said adding that consumers continue to worry about the prospect of job losses (the unemployment rate climbed to 12.2 percent in February - the highest rate since April 2006).
"As a result, retail sales remains lacklustre, with sales down by an average of 13.9 % in value terms in 2009," according to D&B.
The report also said that after the introduction of unsuccessful anti-recession measures, the Croatian government has concentrated on fiscal consolidation to reassure potential investors ahead of any further moves to tap te international capital markets in 2010.
"Instead, the authorities have announced measures designed to increase credit availability to the private sector in a bid to stimulate investment and consumption spending,". the report said.
These include the Croatian National Banks incrementally lowering its reserve requirements from 14 to 11 percent, which could release up to HRK 10 billion, the report said, adding that the Croatian Bank for Reconstruction and Development would then enter into co-funding deals with the now more liquid commercial banks, which could release another HRK 2 billion.
The report, however, warns that there is always the risk that loans will be granted not just to businesses that experienced financial difficulties owing to the global financial cirises, but also to those that are fundamentally unprofitable.
According to latest D&B country reports in the International Risk&Payment Review publication, the credit rating has gone up in Hong Kong, Singapore and Taiwan, but it went down in Latvia and Thailand.
In Croatia's neighbourhood, Slovenia has the best rating with the DB2c risk indicator, and is followed by Croatia and Hungary with DB3d.
The following countries are Albania (DB4a), Macedonia (DB4b), Serbia (DB4d) and Bosnia-Herzegovina (DB6a).
