On 14 July Fitch upgraded Croatia's Long-Term Foreign-Currency Issuer Default Rating to 'BBB+ from 'BBB', with a stable outlook, just after the European Council's Economic and Financial Affairs Council approved on 12 July Croatia's application to join the euro on 1 January 2023.
"Fitch believes that euro adoption is positive for the rating, as it would provide the sovereign with reserve-currency status, reduce transaction costs and limit exchange-rate risk to corporate and household balance sheets," the agency said.
According to Fitch, seven EU member states have a lower rating than Croatia - Italy, Portugal, Greece, Cyprus, Hungary, Bulgaria and Romania.