Fitch: Deficit a concern in Croatia

Fitch Ratings said it said in a new report that while Croatia has so far been sheltered from the impact of the global financial crises, reflecting its relatively strong economic and credit fundamentals, including a banking system that is not over-leveraged or exposed to international capital markets, Croatia's high level of external debt and current account deficit are sources of concern given the current global financial environment.

With the availability of international capital likely to remain limited in 2009, Croatia's high external financing needs make it vulnerable in the current global financial environment, Fitch said.

To ease the macroeconomic adjustment and lessen potential downside risks, measures could be taken to further bolster investor confidence and underpin the economy's ability to continue to withstand international financial pressure, the agency said.

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