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Standard and Poor’s has lowered Croatia's long-term sovereign credit rating to one step above junk because of what it calls the country’s “deteriorated fiscal position and continuously weak external financing.”
From BBB, the new rating BBB- is the lowest investment grade.
An S&P statement said: “Following a real GDP contraction of nearly 6 percent in 2009, we are of the view that the recession will likely have had a greater impact in 2010 that we previously expected, delaying Croatia’s catch-up.”
Croatia projects its GDP will decline by 1.45 percent this year.
