The Standard & Poor's agency has revised upward the City of Zagreb's credit rating from BB to BB+ with the outlook remaining positive, due to the improvement in liquidity and in transparency and governance over the city's finances, the city administration reported on Sunday.

“Every increase in the credit rating means cheaper access to money that enables us to provide citizens with more services at more affordable prices,” Mayor Tomislav Tomašević said in his comment on the fourth upgrade in Zagreb’s credit rating by S&P over the last two years.

The agency notes that the socio-economic profile of the cpaital city was stronger than the country’s average.

In 2022, the unemployment rate in Zagreb stood at 3.1% as against 7.6 in the whole of Croatia.

The city’s GDP is by 75% higher than the Croatian average.

The agency also positively assesses the city’s use of national and EU funds for investment and for post-quake reconstruction. For instance, the City of Zagreb has tapped the Solidarity Fund for €200 million.

Tomašević boasted of the cheapest public transport in this part of Europe and of cheap utilities’ services.

The agency says it can revise upward the city’s rating in the next 12 months provided that Zagreb keeps maintaining this liquidity and the GDP growth.

S&P warns about downside risks which might be caused by an unstable legislative framework owing to frequent changes of tax laws, and says that the government’s latest tax reform will adversely affect the city’s revenues.

In September 2021, S&P changed the Zagreb’s outlook from negative to stable, in September 2022, it revised upward the city’s credit rating from BB- to BB, and in March 2023 it revised upward the outlook from stable to positive.