AGP Executive Report

Robotaxi Push in Europe: Lucid and Bolt announced a non-binding plan to deploy at least 25,000 self-driving Lucid crossovers across major European cities, aiming for SAE Level 4 autonomy in defined areas, with Bolt set to own and operate the fleet. Tourism Demand Holds Up in Dubrovnik-Neretva: Dubrovnik’s “quieter season” is drawing visitors beyond summer, while Ston’s historic attractions are still pulling tens of thousands despite new Pelješac Bridge traffic patterns. Local Health Infrastructure: Dubrovnik-Neretva County is planning a publicly accessible defibrillator network, targeting full coverage in about a year with regular servicing. Sports Facilities Upgrade: Work is underway on Čibača’s auxiliary football pitch (€13,760 plus VAT), with further plans for a bigger main-pitch transformation. Rail Modernisation in Zadar County: Zadar could see passenger rail links by 2028, with a Bibinje tunnel/relocation project estimated at nearly €150m and upgrades plus battery-powered trains. EU Rules on Sustainability Data: Croatia outlined an EU “digital product passport” rollout starting 18 Feb 2027 for certain e-scooter/e-bike batteries, with more product categories to follow. Zagreb Design Week Goes Italian: “Zagreb Design Week” opened in Zagreb with an Italian design day backed by the Italian Embassy and ICE-Agenzia.

Energy & Markets: Saudi Arabia halted crude oil deliveries to Europe after a drone incident damaged a key Red Sea pipeline, leaving refineries scrambling for replacement supply; for Croatia, the knock-on is higher volatility and potential cost pressure as buyers turn to North Sea and US barrels. Infrastructure: Croatia is set to build a new 16-km expressway linking Požega directly to the A3 Zagreb–Lipovac motorway, with two interchanges and major structures (including a 1,650m tunnel), targeting completion by end-2029. Tourism: Dubrovnik continues to grow, topping 1.05m arrivals and 3.4m overnight stays in the first nine months of 2026, with the UK leading demand. Labour Costs: Eurostat data shows hourly labour costs rose fastest in Croatia (+8.9%) for wages and salaries, highlighting renewed cost pressure for employers. Start-ups & Investment: A new $30m fund backs early-stage tech start-ups across South-East Europe, including Croatia, with tickets from $200k to $1m. Digital/Ads: Google will ban promotion of online gambling content targeting Croatia from Oct 7, revoking existing certifications. Business & Growth: e.l.f. Beauty’s Rhode brand expands into Croatia via Sephora across 19 European markets starting Sept 30.

Labour Costs Watch: Eurostat data show hourly labour costs rising fastest in Bulgaria (+9.9%) and Lithuania (+9.6%), with Croatia also high at +8.9% in Q2 2026, while euro area and EU growth stays around 3%—a sign wage pressure is still uneven across the region. Industrial Pulse: Eurostat also flags a slowdown in eurozone industry: eurozone industrial production fell for a second month, with Bulgaria’s output down 2.9% in July year-on-year and Croatia among the few countries posting a monthly increase (+3.9%). Croatian Savings Boom: Croatia’s households poured nearly €2bn into 91-day Treasury bills, with 36,732 citizens buying €1.9998bn and demand pushing the total issue to €2.21bn. Digital & Media Rules: Google will ban online gambling ads targeting Croatia from Oct 7, revoking existing certifications for online gambling promotions. Local Business & Tourism: Split ended its seasonal late-night alcohol sales restriction from Sept 16, while Greece’s short-term rentals kept occupancy steady as rates and revenue rose double digits. EU Politics With Business Impact: Von der Leyen condemned the Mladić funeral “glorification” but held off on Serbia measures, keeping EU accession talks and regional economic uncertainty in focus. Tech & Growth: SimTrade expanded its multilingual publishing to 26 languages, including Croatian and Serbian.

Croatian Household Budgets Under Pressure: Croatia’s inflation ticked up in August to 4.2% year-on-year as transport costs jumped 13.5% and housing-related costs rose 10.8%, ending a brief easing trend and squeezing everyday spending. Public Finance Boost: Croatians poured nearly €2bn into 91-day Treasury bills as 36,732 citizens snapped up the issue, overshooting the government’s €1.75bn plan and offering a small discount-to-maturity return. Zagreb Social Infrastructure: After 20+ years, Zagreb is moving ahead with a €35m Autism Centre in Oporovec for about 200 children, with EU funds covering most of the bill and construction planned to start in summer 2027. Circular Economy Push: EU ministers backed the Circular Economy Act, aiming to remove barriers for circular business models and improve policy coherence across Europe. Tourism & Safety: Wildfire on Brač forced around 500 people to evacuate, including British guests who fled by boat as flames engulfed a resort. Transport Upgrade: A hybrid electric-diesel train has started running on the Zagreb–Split line, using EU-backed financing to serve both electrified and non-electrified sections. Regional Food Spotlight: Eurostat data show Serbia’s organic farming share is just 0.83% of agricultural land, while Croatia sits higher at 9%.

Croatia Inflation Watch: Croatia’s consumer price inflation picked up again in August, rising to 4.2% year-on-year (from 3.9% in July) as transport costs jumped 13.5% and housing-related costs climbed 10.8%, squeezing household budgets. Rail Upgrade: HŽ Passenger Transport has started operating Croatia’s first hybrid electric-diesel passenger train on the Zagreb–Split line, built for mixed electrified/non-electrified sections, with Wi‑Fi, power sockets and bike space; six trains are funded by a €57.3m EIB loan. EU Policy & Travel Tech: The EU is rolling out the EU Digital Identity Wallet (EUDI Wallet) to store and share documents and sign digitally, aiming to reduce reliance on big tech and national systems. Transport Reliability: Croatia ranks worst in Europe for passenger train punctuality in 2024, with only 68% arriving within the regulator’s threshold, with infrastructure works cited as a key delay driver. Tourism & Risk: Wildfires on Brač island forced hundreds of tourists to evacuate, including reports of people fleeing by sea as flames engulfed a resort. Sports & Business Crossovers: Croatia unveiled new adidas national team kits featuring Glagolitic script and lace-inspired design, tying cultural heritage to brand partnerships. Tech & Mobility (Regional): Pony.ai and GAC showcased new Level 4 autonomous heavy trucks in Europe, signaling plans for European road tests and freight expansion.

EU Digital Identity Wallet: The EU is rolling out the EU Digital Identity Wallet (EUDI Wallet) by year-end—an app that lets citizens, residents and businesses store documents, access services and sign digitally, with each member state building its own app under shared standards. Croatia Transport Upgrade: The first hybrid electro-diesel train between Split and Zagreb is now operational, with Wi‑Fi, power sockets, accessibility features and bike space, as HŽ Passenger Transport modernises with EIB-backed funding. Housing & Rentals: Croatia’s rental market is splitting: Zagreb is seeing more supply and lower asking prices, while coastal cities remain tight—especially for students facing high costs and limited long-term options. Food Waste Push: Croatia launches a school project in October to cut food waste, starting with three schools in Zagreb, Daruvar and Opatija, plus education and expanded donation systems. Tech & Mobility: Verne and Pony.ai have started fully driverless robotaxi test rides in Zagreb on public roads, moving beyond earlier trials with a safety operator onboard. Sanctions Watch: EU talks on extending Russian sanctions are stuck, with most member states opposing removing oligarch Alisher Usmanov—Croatia is among those backing expulsion. Tourism & Travel Business: Croatia’s Apple TV launches at €9.99/month with a 7-day free trial, while cruise and travel operators keep expanding Mediterranean itineraries and experiences.

Food & Agriculture Policy: Croatia will launch in October a €3.2m project to cut food waste in schools, starting with three primary schools in Zagreb, Daruvar and Opatija, adding kitchen measures plus education for pupils and expanding food-bank support. Public Transport & Mobility: HŽ Passenger Transport will put a new electro-diesel train on the Zagreb–Split line, with free Wi‑Fi, power sockets, bike space and accessibility features, aiming to cut energy use and emissions. Energy Costs: Petrol and diesel prices in Croatia rise by €0.06 per litre from Tuesday under the government’s weekly price-regulation formula. Tech & Innovation: Pony.ai and Verne have started fully driverless robotaxi passenger tests in Zagreb on a 22-km public route to Franjo Tuđman Airport, moving beyond earlier trials with a safety operator. Business Expansion: Keller Williams awards a new master franchise in Montenegro, targeting a Q4 2026 opening of its first market center. Tourism & Culture: Erdödy Castle in Kerestinec reopens after a €13m restoration, with plans for a heritage collection, library, music school and event spaces. Media & Consumer Services: Apple TV launches in Croatia at €9.99/month (or €79/year) with a 7-day free trial.

Croatia Tourism Watch: Croatia welcomed around five million tourists in August, generating 31.3 million overnight stays (+0.5% y/y), with commercial accommodation still dominating (about 27m nights) while the nautical sector slipped (-2%). Housing & Rentals: New rental rules are set for Jan 1, 2027, aiming to curb rent hikes (only once per year, capped by residential price growth) and speed up evictions, with contracts to be concluded before notaries. Short-Term Rental Debate: A family-host association says more restrictions won’t fix the housing crisis, warning that any bans are being pushed before comparable EU data is available (first comparable figures expected in 2028). Defense Procurement: Croatia signed a €435.2m deal for 18 South Korean Hanwha K239 Chunmoo multiple rocket launchers plus a command-and-staff system, with delivery planned 2026-2029. Tech & Media Security: Nagravision deployed anti-piracy tech to protect Formula 1 broadcasts for RTL Croatia and Pro Plus Slovenia across the 2026 season. Business & Pay: Zagreb’s average net salary rose to €1,765 (June), up 7.6% y/y, while the median net pay was €1,519. Rimac/Bugatti Deal: Porsche completed its exit from Bugatti Rimac and Rimac Group in a roughly €1bn transaction, with cash flow outlook improved and funds earmarked for pensions. Satellite TV Deal: A1 Group renewed a multi-transponder agreement with Eutelsat to support DTH distribution across Croatia and CEE. Wildfire Impact: Fires on Brač forced evacuations of over 700 people, with a second blaze reported near Bol.

Croatian Defence Procurement: Croatia signed a €435.2m (ex VAT) deal for 18 South Korean Hanwha Aerospace K239 Chunmoo multiple rocket launchers plus a Polish command-and-staff system, with delivery running 2026-2029 and 85% expected in 2028. Tourism Momentum: Croatia welcomed about 5m tourists in August, generating 31.3m overnight stays (+0.5% y/y), with commercial accommodation near 27m nights. Air Connectivity: Transavia will add seasonal Amsterdam–Pula flights for summer 2027, booked from mid-September, boosting Dutch access to Istria. Logistics & Trade: Rijeka Gateway marked its first commercial year by handling 370k TEU and building links with Maersk and Hapag-Lloyd, with cargo split at 42% rail and 58% road. Postal Market Shift: Croatia’s postal revenue hit a record €115m in Q2 2026 (+16.1% y/y) as parcels grew 13% to 18.4m and letters continued to fall. Infrastructure & Travel Demand: Croatian airports posted a record summer, with July passenger traffic up to 2.35m (+1.7% y/y), led by Split. Local Life & Culture: Dubrovnik’s Gradac Park reopens Sept. 16 after a €4.4m renovation, adding new paths, lighting and hundreds of trees.

Tourism & Transport: Rijeka Gateway marked its first year of commercial operations by landing cooperation with Maersk and Hapag-Lloyd, handling 370,000 TEU, and moving cargo 42% by rail and 58% by road, while Croatia’s airports logged a record summer—2.35m passengers in July (+1.7% y/y), led by Split (767k). Postal & E-commerce: Croatia’s postal market kept shifting to parcels as e-commerce drove revenue up 16.1% y/y to a record €115m in Q2; parcels were 59% of revenue and volumes rose 13%. Mobility Tech: Pony.ai and Verne started fully driverless robotaxi passenger testing on public roads in Zagreb on a 22 km route to Franjo Tuđman Airport, with plans to expand across city zones. Corporate/Finance: Porsche completed its €1bn exit from Rimac—selling its 21% in Rimac Group and 45% in Bugatti Rimac to a consortium led by HOF Capital (Rimac keeps 55% control). Policy & Cost of Living: Croatia is proposing a one-off 50% tax on “excessive” profit margins for 2026 for firms deemed able to influence inflation, alongside a broader anti-inflation tax package. Business Climate: Croatia’s tourism remains highly seasonal—the EU’s biggest summer-to-winter employment swing—highlighting the challenge of stabilizing jobs year-round.

Croatia Tax Policy: Croatia is proposing a one-off 50% tax on “excessive” profit margins for 2026, targeting firms that can influence inflation via pricing; the measure would apply to about 1,800 companies whose 2026 margin exceeds their own average from 2023-2025 by more than 15%. Tourism & Jobs: Despite challenges, Croatia says it logged 17.5m arrivals and 90.5m overnight stays in Jan–Aug 2026 (+1%), with fiscalized revenue up 17.6% to €7.41bn—yet new data highlights the EU’s biggest summer-to-offseason employment swing in accommodation and food services. EU Housing Rules: The EU’s Affordable Housing Act would let cities restrict holiday home ownership in “housing stress” areas, potentially hitting buyers from the UK and tourist hotspots including Croatia. Tech & Mobility: Pony.ai and Verne have begun fully driverless robotaxi passenger testing on public roads in Zagreb on a 22km route, with Uber handling bookings. Waste & Environment: Croatia is again under pressure after reporting that it is the only EU country without a waste incinerator, with debate shifting to where thermal treatment should happen. Retail Expansion: A new 14,000 sq m Stop Shop retail park near Samobor opens with 23 brands and around 100 jobs. Security: A school attack in Zagreb left two injured; the attacker was arrested shortly after.

Autonomous Mobility: Pony.ai and Verne have started fully driverless robotaxi passenger testing on public roads in Zagreb, using a 22 km route between Verne’s HQ and Franjo Tuđman Airport, with bookings via Uber and plans to expand across the city. Tax & Cost of Living: Croatia is proposing a one-off 50% tax on “excessive” 2026 profit margins for large and medium companies that can influence inflation, plus a separate government package of energy-price relief worth nearly €260m running Oct 1, 2026–Mar 31, 2027. Housing Support: Croatia reports 7,479 first-home support applications, with 4,881 approved for payment, as young buyers seek help under the new scheme. Consumer & Retail: A new 14,000 sq m shopping retail park near Samobor (Stop Shop) opens with 23 brands and around 100 jobs. Waste Crisis: Croatia is again in the spotlight over hazardous waste in Lika, with protests demanding urgent cleanup and renewed debate on waste incineration capacity. Tourism: Croatia hails another “extraordinary tourism year,” citing 17.5m arrivals and 90.5m overnight stays in Jan–Aug 2026, with revenue up strongly. Business Finance: Oraclum Capital founder Vuk Vukovic faces US fraud charges over alleged inflated hedge fund returns, adding to regulatory pressure on the firm.

Housing Support: Croatia’s first-home scheme is drawing strong demand: 7,479 applications were submitted by Friday, with 4,881 approved for payment and over €36.9m already cleared, as APN reports rejections tied to price and eligibility rules. Energy Aid: The Croatian government adopted an 11th package to shield households and businesses from energy-price pressure, worth nearly €260m, running from Oct 1, 2026 to Mar 31, 2027. New Tax-Advantaged Investing: A proposed Croatian Investment Account would start Jan 1, 2027, letting adults (and minors via an account) invest up to €200,000 per person with tax-free gains and withdrawals if conditions are met. Defense Procurement: Croatia signed a €411.8m deal with Hanwha Aerospace for 18 K239 Chunmoo MLRS systems, with deliveries planned through 2030 and command-and-control integration via Poland’s WB Group. Waste Crisis Response: Holcim Croatia and Nexe were tasked to remove and recover about 650 tonnes of non-hazardous waste from the former PPK Velebit site in Gospić within 45 days. EU Housing Rules Watch: An EU crackdown on holiday-home ownership could make it harder for Britons to buy properties in popular destinations, with Croatia flagged among potentially affected hotspots. Transport Economy: Croatia’s rail freight grew in Q2 2026, with private operators gaining ground while state carrier HŽ Cargo slipped.

Croatian Tourism Boom: Croatia logged 17.5 million arrivals and 90.5 million overnight stays in Jan–Aug 2026, up 1% year-on-year, with August alone topping 5 million arrivals for the first time. Postal Sector Shift: Croatia’s postal market hit a new quarterly revenue record at about €115m in Q2 2026 (+16.1% y/y), driven by parcels (18.4m, +13%) as letters continue to slide. Defense & Industry: Croatia signed major deals with South Korea’s Hanwha Aerospace for 18 Chunmoo multiple-rocket launchers (about €411.8m) and related support, with deliveries planned through 2030. Family Policy: The government introduced up to €15,000 support for larger families buying seven-seat cars. Waste Crisis Response: Zagreb proposed an emergency plan to handle around 650 tonnes of hazardous waste from the Lika area, including burning in cement plants within 45 days. Road Toll System Watch: Croatian Motorways says the new Crolibertas toll system deadline is set by law and activities are proceeding despite procurement appeal delays. Automotive Deal Closure: Porsche has completed its exit from Bugatti Rimac and Rimac Group in a roughly €1bn sell-off, ending the VW-era link.

Croatia’s Defence Push: Zagreb signed a €435.2m deal with South Korea’s Hanwha Aerospace for 18 Chunmoo K239 multiple rocket launchers, with delivery by 2029, plus a separate contract with Poland’s WB Electronics for command-and-control integration—part of a wider military modernisation and deterrence upgrade. Automotive Deal in Motion: Porsche has completed its exit from Bugatti Rimac, selling its stakes in both Bugatti Rimac and Rimac Group to a consortium led by HOF Capital (with BlueFive as a major investor), in a roughly €1bn transaction that lifts Porsche’s 2026 cash flow outlook. Tourism Numbers: Croatia logged 17.5m arrivals and 90.5m overnight stays in Jan–Aug 2026 (+1% year-on-year), with August hitting a record 5m+ arrivals. Healthcare Innovation: Dubrovnik General Hospital implanted its first next-generation Micra leadless pacemakers, marking a new cardiology milestone without chest incisions or traditional leads. Tech & Mobility: Spain granted its first national permit for Level 4 autonomous passenger vehicle testing, clearing WeRide and Uber to prepare a Madrid robotaxi rollout later this year. Robotaxi Expansion: Pony.ai and Verne began fully driverless Zagreb rides, adding to Croatia’s growing autonomous mobility footprint. Legal Reform: Croatia plans to introduce life imprisonment with parole possible after 25 years from Jan 1, 2027, alongside new supervision measures. Energy Context: A new EU snapshot shows fossil fuels still power nearly 30% of Europe’s electricity on average, with big country differences.

Family Mobility Boost: Croatia launched a pilot scheme for families with four or more children offering up to €15,000 (50% of a 7-seat vehicle price, incl. VAT) to ease transport costs, with a €2.2m budget and eligibility rules on existing vehicles, income and special family circumstances. Tourism Spotlight: Dubrovnik was named one of the world’s best September destinations by Travel + Leisure, highlighting calmer crowds and strong air connectivity. Auto Tech & Capital Flows: Porsche completed its exit from Croatia’s Rimac ecosystem, selling its stakes in Bugatti Rimac and Rimac Group for about €1bn, lifting its 2026 cash-flow outlook. Energy & Costs Watch: Brent crude stayed above $100 after renewed Hormuz shipping risks, raising pressure on European fuel and inflation expectations. Transport Infrastructure: Croatian Motorways says the Crolibertas toll system is still on track within legal deadlines despite procurement delays. Ports & Logistics: Rijeka Gateway reported strong early performance and expects higher capacity ramp-up in 2027. Defense Modernisation: Croatia signed a €33.2m deal to upgrade Rafale combat communications (2026–2030). Environment Crisis: Lika’s hazardous waste scandal continues to spark public concern and scrutiny as authorities pursue arrests and pollution assessments.