AGP Executive Report

Croatian Growth Watch: Croatia’s economic growth slowed to 1.7% year-on-year in Q2 2026, down from 2.2% in Q1, with weaker household consumption and investment flagged by the Croatian Employers’ Association (HUP). Household Demand: Household consumption rose just 0.5% (vs 2.6% in Q1), the weakest outside the pandemic period since 2015. Public Spending & Construction: Government consumption accelerated to 2%, and construction stayed a bright spot (+3.1% real value added). Exports Mix: Exports of goods and services grew 3%, with goods exports up 5.2% but concentrated in energy, chemicals, electrical products and parts of food. Industrial Pressure: Manufacturing stagnated and total industrial value added fell 0.5%, while HUP warns growth is becoming more dependent on construction, public spending and a narrower set of export sectors. On-the-ground Business Signals: Dutch gin brand Sir Edmond Gin expands in Croatia via a listing with Aminess across its hotels, resorts and restaurants, after reporting 53% sales growth in May–June.

Croatia’s Power Grid Overhaul: The government adopted draft Electricity Market Act amendments to fix grid access and connection delays that have left renewables stuck, including restarting deadlines when the national connection-charge framework was unresolved. Economic Momentum: Croatia logged its 22nd straight quarter of growth, with GDP up 1.7% in the latest quarter (slower than last year’s stronger base). EIB Boost for Business and Energy: The European Investment Bank approved €9.2bn in financing, including €4.3bn channeled via local banks for SMEs across Croatia and other countries, targeting energy autonomy, grids, defence/space and agriculture. Tourism and Travel Deals: easyJet holidays launched package trips to Opatija-area and Zadar options, adding new hotel choices for 2026/27 travel. Tech and Mobility Watch: Uber rolled out live video for teen accounts in the US, while London’s robotaxi plans stalled due to missing regulatory steps. Local Defence Tech: Croatian drone maker Orqa was selected by the US Army’s 2nd Infantry Division to procure FPV drones. Sports Business: Barcelona signed Croatian goalkeeper Dominik Livaković from Fenerbahce on a four-year deal to 2030.

Croatia’s Power Rules Update: The government adopted draft Electricity Market Act amendments to fix grid-access delays and restart deadlines when the national connection-charge framework wasn’t set, aiming to align with EU market rules and protect renewable projects. Economic Momentum: Croatia logged its 22nd straight quarter of growth, with GDP up 1.7% in the latest quarter, though momentum cooled versus last year. Tourism Shift: Croatia’s 2026 season is seeing more “ultra last-minute” bookings and shorter stays, with Germany and parts of Austria softer while domestic and Central European demand holds up. Adriatic Infrastructure: A new Slano–Ston cycling and walking trail moved forward after a contract award worth about €892k (VAT incl.), with added amenities like e-bike charging and repair stations. Local Culture & Food: Ston’s 10th Salt Festival kicks off with an Eco Market and special menus across Pelješac. Tech & Security: An “INF Group” hacking ring was arrested over breaches targeting state institutions, companies and citizens’ data across the region. Business & Industry: Video games in Europe hit €29.7bn revenue in 2025, with digital at 91%—and Croatia is now included in the expanded market survey. Defense Tech: Croatian drone maker Orqa was selected by the US Army’s 2nd Infantry Division to procure FPV drones after supplier evaluation.

Croatian Economy Watch: The Zagreb Economic Institute (EIZ) points to 1.8% year-on-year growth in Q2 2026, with tourism the weak spot in June as arrivals fell versus May. Energy & Costs: Croatia’s fuel prices are rising again, but the year-on-year jump is still milder than the EU average (diesel +14%, petrol +8%), keeping Croatia below the EU benchmark. Adriatic Fisheries: Croatia is preparing to cut sardine fishing days sharply after stocks hit historic lows, with purse seiners in zone A facing a proposal to drop from 20 to 5 days per month. Fire Preparedness: Croatia’s firefighters received six new forest-fire vehicles in Zagreb, while reporting highlights how many fires start on overgrown private land. Innovation in Istria: Istria is investing over €10.18m in a new high-tech research centre in Pula (METRIS), aiming to give SMEs access to advanced lab and prototyping equipment. Tourism & Transport: Dubrovnik is electrifying public transport with 12 new fully electric buses (project value €10.49m, mostly EU-funded). Tech & Business Funding: Zagreb-based VC AYMO Ventures backed Friendly Fire with a €4.7m Series A to scale its gaming-café franchise model.

Istria R&D Push: Istria County signed a €4.87m contract to rebuild the former “old surgery” building in Pula General Hospital into the ISTRAživački centar METRIS, a ~€10.18m high-tech research hub linking labs with local SMEs, with advanced microscopes, prototyping and AI-enabled capabilities. Adriatic Fisheries: Croatia is set to cut sardine fishing days in Adriatic zone A from 20 to five per month for each authorization until the winter ban, after assessments showed sardine biomass at historically low levels and fishing mortality far above target. Public Transport Upgrade: Dubrovnik unveiled 12 fully electric MAN buses (project value €10.49m, mostly EU-funded) to modernize Libertas routes, with plans to expand the fleet to 14 new electric buses. Defense Tech Export: Osijek-based Orqa says the US Army’s 2nd Infantry Division selected it as an FPV drone supplier after field evaluation, marking another step toward the US defense market. Energy & Policy Watch: EU enlargement commissioner Marta Kos outlined a reform plan built on transitional measures, internal changes, safeguards and gradual integration. Croatia–US Ties: Zagreb met US Congresswoman Claudia Tenney to expand trade, investment and energy cooperation and advance a double taxation treaty. Waste Cleanup: Gospić illegal waste remediation moves forward after two bids were received for the first phases, covering ~4,500 tonnes of mixed hazardous waste and ~650 tonnes in big bags. Tourism Connectivity: United Airlines announced 10 new 2027 destinations, including nonstop service to Ljubljana, boosting direct links for the region.

Port of Rijeka & Automotive Imports: Croatia’s port is ramping up car logistics after the first major shipment of Chinese vehicles arrived at Rijeka, with over 2,000 cars delivered and more expected as the port expands capacity. Consumer Lending: Croatia is tightening consumer credit rules from October, a move aimed at cooling household borrowing and managing financial risk. Tourism Push: Dubrovnik is edging toward 900,000 tourists as the 2026 season builds, while Istria is getting a major boost from a German TV feature reaching millions. EU Enlargement & Croatia’s Region: EU Commissioner Marta Kos outlines a new “Helsinki Moment” for enlargement—internal reforms, safeguards and gradual integration—while extreme heat and drought are hitting European harvest forecasts, including Croatia. Tech & Mobility in Croatia: Uber’s robotaxi service is already live in Zagreb, and Waymo plans to test autonomous vehicles in Munich next year, signaling intensifying competition in European mobility. Business Networks: A new alliance of European chambers in Western Australia includes Croatia’s business community, aiming to grow trade and investment links with the EU.

Chinese Car Imports: The Port of Rijeka received its first major shipment of Chinese cars—over 2,000 vehicles—boosting Croatia’s role as an entry point for the European auto market, with more arrivals expected as logistics partners line up. EU Enlargement Overhaul: EU enlargement commissioner Marta Kos outlined reforms aimed at protecting rule-of-law standards and speeding up decision-making, including gradual integration for candidates and tighter accession safeguards ahead of an October leaders’ discussion. Autonomous Mobility in Croatia/Europe: Waymo will start testing robotaxis in Munich next year (commercial service targeted for end-2027), while Uber has already launched self-driving rides in Zagreb—another sign that Croatia is becoming a regional testbed for new mobility services. EU Trade Defenses: The European Commission is widening trade defenses as imports of Chinese vehicles, batteries and machinery rise, with new monitoring and anti-dumping pressure on sectors linked to industrial overcapacity. Croatia Housing Push: Osijek-Baranja County launched a long-term rental-to-own programme for young families, offering 10-year rentals with an option to buy later. Tourism Demand Signal: Kensington’s luxury travel data shows Croatia among the fastest-growing destinations, with bookings up 61% year-on-year. Consumer Credit: Croatia is set to tighten consumer lending rules from October, aiming to curb household risk as costs and prices remain under pressure.

Housing & Demographics: Osijek-Baranja County launched “Our Slavonia and Baranja – Our Home,” building 43 houses and 3 apartment buildings (52 units) for young families, with long-term rentals (at least 10 years) and a right to buy after 10 years, crediting rent toward the purchase price. Tourism Watch: Dubrovnik is nearing 900,000 tourists in 2026, with 897,379 arrivals and 2.88m overnight stays through Aug 17—about 1% ahead of last year, led by the UK, US and France. Climate & Safety Tech: Croatia expanded its AI-based early wildfire detection network to 75 cameras across 25 new locations, boosting 24/7 monitoring in protected areas and faster county response. Healthcare Investment: KBC Rijeka carried out its first robot-assisted gynecological surgeries using a €5.11m system fully funded from the state budget. Property Market Snapshot: A €200,000 budget buys far more space in Pula (56.8 m²) than Split (33.3 m²), highlighting the Zagreb–Split gap in asking prices. Infrastructure & Local Capacity: Dubac Cemetery in the Dubrovnik area is moving into its final phase, with first new plots expected in early 2027 and potential expansion toward ~3,500 graves.

Croatian Health Tech: KBC Rijeka performed its first robot-assisted gynaecological surgeries after installing a €5.11m robotic system fully funded from Croatia’s state budget, aiming for smaller incisions and faster recovery. Housing & Consumer Pressure: A Kvadratko analysis shows €200,000 buys far more space in Pula (56.8 m²) than Split (33.3 m²), while Zadar residents report record-high grocery costs and rising prices hitting everyday budgets. Property Market Snapshot: Zadar was also flagged as Croatia’s most expensive city in July, underscoring how local growth can squeeze households. Transport & Infrastructure: Work has started on the second and third phases of the Drniš bypass, a €34m-scale push expected to support Šibenik Port and the wider expressway corridor. Energy & Cost Outlook: Croatia is facing higher fuel-price pressure tied to global shocks, even without a shortage. EU/Region Watch: The European Commission is preparing an accelerated Montenegro accession push, with concerns about “hybrid influence” potentially slowing reforms.

Croatian Consumer Credit Tightening: The Croatian National Bank has opened a public consultation on rules from October that cut banks’ allowed exemptions for consumer lending, lowering quotas for loans breaching DSTI and LTV limits. Cross-Border Friction: A new Croatia–Bosnia border crossing at Gradiška is operating on a temporary permit after parts of the old bridge collapsed, with the long-term legal status still unresolved. Wages Up: Croatia’s average net salary rose to €1,555 in June (+7.7% year-on-year), with air transport the top-paying sector at €2,330. Energy Prices Watch: Croatia isn’t facing a diesel shortage, but experts warn prices will likely stay high due to tight European supply and refinery limits. Tourism Signals from Župa dubrovačka: Arrivals are up versus last year, while overnight stays are about 2% lower, with UK and US still leading. Local Economy & Infrastructure: Zagreb is investing over €3m in tram track renovation, while Ryanair ramps up Zagreb–London demand (+20%). Sustainability in Industry: EcoCortec says it manufactures compostable stretch/shrink films in Croatia as drop-in replacements for polyethylene on existing packaging lines.

Consumer Credit Tightening: Croatia’s central bank (HNB) is set to further rein in consumer lending from October, cutting banks’ allowed “exemption” shares for riskier loans—e.g., residential loans with DSTI above 45% drop to 10% (from 20%), and high LTV real-estate-backed lending quotas fall to 10% (from 20%). Household Pay Watch: June data shows average net salaries in Croatia rose to €1,555, up 7.7% year-on-year, with air transport the top-paying sector at €2,330. Housing & Rentals: Croatia is preparing a new Law on Renting Apartments, aiming to tighten contract rules, extend notice periods, and push more long-term rentals onto the market. Border Bureaucracy: A new Croatia–Bosnia border crossing at Gradiška is operating on a temporary legal basis after the old bridge damage, keeping traffic in limbo. Tourism Pulse: Župa dubrovačka reports more arrivals but slightly fewer overnight stays (about 2% down), with the UK and US leading and one “surging” market standing out. Fuel Prices Ahead: Croatia isn’t facing a diesel shortage, but analysts warn prices will rise as global refining and supply pressures persist.

Wages Watch: Croatia’s average net salary rose to €1,555 in June 2026, up 7.7% year-on-year, with real growth of 3.1%; aviation led the pay league at €2,330 net, while clothing manufacturing lagged at €988. Housing & Rentals: Croatia is preparing a new Law on Renting Apartments, aiming to tighten long-term rental rules, add contract requirements and longer notice periods, and push empty homes into the market. Credit Controls: The Croatian central bank (HNB) will tighten consumer-lending limits from Oct 1, cutting the share of high-risk residential loans above DSTI thresholds and reducing high-LTV approvals. Energy Costs: Croatia isn’t facing a diesel shortage, but prices are set to rise again as refinery capacity constraints and global supply shocks keep pressure on fuel markets. Climate & Agriculture: Central Croatia’s grape harvest is shifting earlier into August as milder winters and changing rainfall accelerate ripening, with expectations of lower yields but good quality. Transport & Tourism: Ryanair carried nearly 95,000 passengers on the Zagreb–London Stansted route in H1 2026, up 20.3%, as low-cost capacity expands. Environment Law: Croatia is moving toward introducing “ecocide” as a criminal offence, with the most serious cases potentially facing life imprisonment. Tech in Mobility: Uber launched Europe’s first self-driving ride service in Zagreb, marking a new step for autonomous transport in the region.

Housing Policy: Croatia is preparing a new Law on Renting Apartments that could tighten long-term rental rules, add formal contract requirements, extend notice periods and reshape rent-setting, while also increasing obligations for local authorities and creating a new agency role—aimed at boosting security for both landlords and tenants and encouraging owners to put empty homes on the market. Consumer Finance: The Croatian National Bank plans to tighten consumer lending from October 1, cutting the share of residential consumer loans above DSTI 45% to 10% (from 20%), lowering non-residential quotas, and reducing high-LTV (above 90%) real-estate-backed loan shares to 10% (from 20%) to protect financial stability as household borrowing stays strong. Energy Costs: Croatian drivers may see another fuel-price jump next week as the Iran-war-linked energy shock keeps refining pressure high; projections point to Eurosuper 95 up to about €1.65/l and Eurodiesel toward €1.86/l. Transport & Tourism: Ryanair carried nearly 95,000 passengers on the Zagreb–London Stansted route in H1 2026 (+20.3%), while Croatia’s tourism push also highlights Koper as a cheaper “Venice alternative.” Tech & Mobility: Uber launches Europe’s first robotaxi rides in Zagreb, adding a new layer to the city’s transport experiment.

Fuel Watch: Croatia could see another jump in pump prices next week as the Iran-war shock keeps pressure on global refining. Early projections point to Euro-super 95 up to about €1.65/l (+2 cents) and diesel higher—Eurodiesel to €1.86/l (+6) and “blue diesel” to €1.32/l (+5)—with the government expected to confirm the final numbers on Monday. Energy Poverty Protections: Parliament is set to consider amendments to Croatia’s Electricity Market Act to ban disconnections for vulnerable, energy-poor households and require suppliers to warn on unusual consumption, offer flexible repayment plans, and guide access to support. Environment & Justice: Croatia is preparing to introduce “ecocide” as a criminal offence, with the most serious cases potentially carrying life imprisonment, as part of a push to tackle waste and severe environmental damage. Transport & Tourism: Ryanair carried nearly 95,000 passengers on the Zagreb–London Stansted route in H1 2026 (+20.3%), while Air Serbia plans to add a third weekly Belgrade–Brač flight from June 2027. Geothermal Pipeline: A consultation has opened for a €35.15m tender to drill four exploratory geothermal wells in Velika Gorica, Osijek, Vinkovci and Zaprešić. Wildfire Pressure: Europe’s wildfire season is worsening, with Croatia reporting major firefighting activity around Omiš and on Pelješac, including casualties and evacuations.

Croatia Energy Policy: The Croatian government has sent draft amendments to the Electricity Market Act to Parliament to ban electricity disconnections for vulnerable households facing energy poverty, while requiring suppliers to warn about unusual consumption spikes and offer flexible repayment plans plus debt-management guidance and access to support/vouchers. Aviation & Tourism: Ryanair boosted Zagreb–London Stansted traffic, carrying 94,289 passengers in H1 2026 (+20.3%) after adding capacity (+23%), while Air Serbia plans to add a third weekly Belgrade–Brač flight from June 1, 2027. Transport & Cities: Uber has launched autonomous rides in Zagreb via a partnership with Verne and Pony.ai, with a safety operator at launch; Zagreb also continues tram infrastructure upgrades (over €3m). Tech & Industry: Croatia-based Neuromorphyx and BrainChip launched the BrainBoard1500, an Arduino Nicla-compatible board for the AKD1500 neuromorphic accelerator. Geothermal Push: Croatia opened a preliminary consultation for a €35.15m tender to drill four exploratory geothermal wells (Velika Gorica, Osijek, Vinkovci, Zaprešić). Wildfires & Costs: Record heat and drought are driving a severe wildfire season; Croatian firefighters battled major blazes including the Omiš area, with casualties and evacuations reported. Nord Stream Legal Fallout (EU energy security): Croatian authorities arrested a Ukrainian diver linked to the 2022 Nord Stream sabotage, with reports tying the arrest to a Hollywood film set in Pula.

Nord Stream Case in Croatia: A Croatian court ordered custody for a Ukrainian scuba diver (Vladimir/Volodymyr Zhuravlyov) wanted by Germany over the 2022 Nord Stream pipeline sabotage, with extradition proceedings now moving forward. Tourism Value Push: Croatia’s tourism debate is shifting from visitor counts to “value for money,” as occupancy stays high but quality and pricing pressure the next season. Food Inflation Risk: Croatia’s agriculture adviser warns drought damage could feed into higher food prices next year, with estimates ranging from +20% to +40%. Landlords vs New Rules: Croatian small landlords filed an objection with the European Commission, arguing new Hospitality Activity Act provisions could force re-categorisation and give neighbours power to block rentals. Retail Expansion: Victoria’s Secret is set to open its first Croatian store in Zagreb (Arena Centar) in Q4 2026 via Alshaya. Robotaxi Rollout: Uber launches autonomous rides in Zagreb (with a safety driver) and expands driverless robotaxi services in Europe, including Croatia-linked deployments. Climate & Wildfires: EU wildfire response is under scrutiny as the bloc leans on professional firefighters, with Eurostat data highlighting big differences across countries. Tourism Pressure Data: Eurostat shows Greece’s regions are among the most tourism-saturated in the EU, with Croatia’s Adriatic coast also high on overnight stays per resident. Drought Reveals History: Europe’s rivers are running dry, exposing old shipwrecks like Serbia’s “Sava’s Titanic,” underscoring disruption to trade and water supplies.