The Standard & Poor's agency has affirmed its 'BBB-" credit rating on Croatia, with a stable outlook, the government said on Tuesday.

The credit agency’s report said that Croatia’s stable political climate and plans to enter the euro area are conducive to reform efforts.

The agency projects a general government deficit of 2.9% of GDP in 2021. It also expects Croatia’s debt to resume falling and go below 80% of GDP until the end of 2024.

The report also highlights the recovery of household consumption due to lower taxes, as well as the government’s retention measures, which result in a better-than-expected situation on the labour market.

The report is confirmation of Croatia’s economic and financial stability, Prime Minister Andrej Plenkovic said, adding the government is focused on investments that will generate faster growth.

He pointed to Croatia’s opportunities to tap EU funds and investments as an important factor for growth in the coming decade.

He also said Croatia made good headway in reducing the administrative burden so as to improve the country’s business climate, adding that in July 2020, Croatia entered ERM II mechanism on its journey towards the euro area.