AGP Executive Report

Tourism & Infrastructure: Croatia’s National Tourist Board says 2026 is tracking positively, with May ending in growth for arrivals and overnight stays and demand holding up into June, helped by stronger performance from key markets and new US air links (including United’s New York–Split). EU Fiscal Oversight: The European Commission issued five recommendations urging Croatia to tighten control of public spending, improve efficiency, and steer investment toward long-term growth as net expenditure is projected to rise faster than agreed targets. Banking & Consumer Costs: Croatian banks face renewed scrutiny over fees as customers increasingly rely on digital payments, with concerns that costs haven’t fallen as cash use declines. Nautical Charter Market: Croatia’s charter sector is shifting toward premium boats: average prices up 11% and the >20m segment up 26%, while listings stay broadly stable and Dalmatia dominates supply. Wages & Jobs: Average salaries in Croatia rose 9% to €1,621/month, with IT still leading (€1,904 net) and agriculture/forestry/fisheries seeing the slowest growth. Construction & Heritage: A €2m restoration at the Ludbreg Holy Trinity church is underway, with reinforcement work uncovering human remains in newly found graves. Weather Risk: Early summer remains unstable, with storm warnings affecting transport, events, agriculture and tourism operations.

EV Charging & Finance: The European Investment Bank is teaming up with Ireland’s transport ministry and ZEVI to speed up a nationwide EV charging rollout, using procurement and contract templates plus financial models to get chargers within reach of every community. Renewables & Energy Security: SolarPower Europe says solar has saved Europe €12.8bn since early June 2026, averaging €136m a day, as Iran-linked oil and gas volatility keeps energy costs high. Industrial Policy for Open Markets: OECD ministers backed targeted industrial policies while defending open trade, adding a new recommendation on quantum technologies. Croatia Wages Snapshot: Croatia’s average net salary hit €1,621 in 2026 (+9% y/y), with IT leading (€1,904) and agriculture lagging (+3%); tourism/hospitality averages €1,510 but varies widely by role. Tourism Demand: Croatia’s tourist board says 2026 is tracking its year-round strategy, with growth in key markets including Germany, Slovenia, Italy, Hungary and the US, helped by new direct flights. Infrastructure & Culture: BIG and Marko Pepunić are advancing EVE Music Hall in Čepin, a 10,000 m² venue for concerts and congresses opening in early 2027. Fintech Access: Noviraf expands online consumer lending across Croatia to reduce regional credit gaps via fully remote applications and approvals. Aviation Safety: A small plane crash near Medulin in Istria killed at least four people; investigators are looking into the cause.

Croatian Tourism Leadership: HTZ Director Kristjan Staničić was reappointed for another four-year term, stressing a year-round push and strong 2026 momentum, with May bringing growth in arrivals and overnight stays and rising demand from key markets including the U.S. after new direct flights. Travel Demand & Positioning: New reporting says Croatia’s 2026 social buzz is shifting from “just beaches” toward authenticity, local food and wine, safety, and slower-paced experiences—while the Adriatic still drives the biggest attention. EV Infrastructure Push (EU finance): The European Investment Bank is partnering with Ireland to speed up public EV charging rollout, using procurement and contract templates to help communities build faster and more fairly—an EU-style model that matters for regional infrastructure planning. Fintech Access in Croatia: Noviraf is expanding a fully online lending model aimed at equal consumer credit access across Croatia, reducing the geography-based friction of traditional banking. Tourism Cost Pressure: Croatia’s new anti-inflation measures are drawing anger from tourism landlords, with concerns they could squeeze small accommodation owners during the peak season. Regional EU Ambition: Montenegro renewed its “28 by 28” push for EU membership, but reforms—especially corruption—remain the key hurdle. World Cup Logistics Hit Local Venues: A York venue (SPARK) confirmed it won’t screen 2026 World Cup games, citing match-time disruption risks for nearby businesses and neighbors. Maritime Trade Costs: CMA CGM announced a major peak-season surcharge for East Mediterranean to U.S. East Coast container moves, including routes originating in Croatia.

Energy Deal: SOCAR, TotalEnergies, XRG and BOTAŞ signed a 15-year gas supply agreement for 33bn m³ from Azerbaijan’s Absheron field to Türkiye, with first full-scale development decisions expected in 2026 and production starting in 2029. Croatia Economy: New data points to a slowdown after years of growth, with tourism no longer able to carry the whole economy alone. Tourism & Housing Friction: Croatia’s new anti-inflation measures have sparked anger among tourism landlords, while a separate law lets cities restrict late-night shop alcohol sales to curb tourist-resident clashes. EU Policy: The European Commission’s 2026 European Semester Spring Package pushes competitiveness, skills, decarbonisation and fiscal discipline, with housing crisis and resilience high on the agenda. Industry & Infrastructure: Croatia’s KBC Osijek hospital project moves into the realisation phase after a land handover, and HŽ Infrastruktura’s rail upgrade on the Dugo Selo–Novska corridor is set to improve speeds up to 160 km/h. Tech & Enforcement: Europol’s crackdown on illegal streaming networks led to 29 arrests and takedown of 27,000 piracy URLs across Europe. Business Climate: Eurostat data shows industrial producer prices rose in April, with Croatia among the biggest monthly movers.

Major Rail Contract for Croatia: Indian contractor Afcons Infrastructure will deliver Croatia’s biggest railway project so far—€677.1m (ex VAT) for the Dugo Selo–Novska line, adding a second track, upgrading stations, signalling and power, and targeting up to 160 km/h, co-financed by EU funds. Healthcare Infrastructure: KBC Osijek’s new Clinical Hospital Centre has entered a realisation phase after a land donation handover, clearing legal steps for procurement and construction on a project worth over €850m. Property Costs Hit Buyers: Croatia’s home market stays price-stable, but renovation is becoming the deal-breaker: renovation can add roughly 20–35% to total investment, with typical costs for a 60 m² flat estimated at €45k–€70k. Tourism Push in Germany: Croatia opened a new tourism office in Berlin to strengthen its German market push alongside Munich, aiming to extend the season and improve year-round connectivity. Inflation Watch: Croatia’s inflation eased to 5.2% in May (from 5.8% in April), with energy still the main driver. Naval Industry Link: Navantia signed MoUs with Croatian partners for a navy corvette programme, aiming to build local value chains and jobs. Cybersecurity Capacity: Slovenia’s SI-CERT says it handles about 6,000 incidents a year, showing how regional incident response teams are scaling up. Tourism Management Pressure: CLIA CEO Bud Darr criticised Santorini’s cruise tourism rules as “completely unacceptable” and a safety risk.

Navantia & Croatian shipbuilding: Navantia signed MoUs with Nortes Blue and Uljanik Brodogradnja 1856 for Croatia’s navy corvette program, aiming to build a local value chain, jobs and knowledge transfer. Island infrastructure push: Croatia invested €4.6bn in inhabited islands over the past decade, with new contracts and ferry links approved to improve transport, utilities, healthcare and education. Robotaxi race in Europe: Uber, Nvidia and Autobrains plan to launch a robotaxi programme in Munich using Nvidia’s DRIVE Hyperion, pending German regulator approval—after Zagreb’s first limited service. Croatia inflation cools: May inflation eased to 5.2% y/y (from 5.8% in April), driven by slower energy and services growth. Aviation growth: Croatia Airlines carried 775,000 passengers Jan–May 2026 (+20%), supported by its Airbus A220 fleet renewal. World Cup logistics in focus: Philadelphia detailed security, transit and fan-festival plans for matches starting June 14, while Newark highlighted improved on-time performance after earlier disruptions. Cyber capacity in the region: Slovenia’s SI-CERT said it now handles about 6,000 incidents a year, using triage lines for fraud, phishing and complex cases. Film industry spotlight: Split’s Mediterranean Film Festival (June 11–20) will screen 112 films from 39 countries, with a record number of Croatian premieres.

Inflation Watch: Croatia’s annual inflation eased in May to 5.2% (from 5.8% in April), with energy still the main driver (+16.9% y/y) while non-energy industrial goods fell (-0.7% y/y) and services rose (+7.9%). Island Development: Croatia has invested €4.6bn in its inhabited islands over the past decade, and approved a new €25m package to keep improving transport, utilities, healthcare, education and energy—plus new state ferry links. Tourism & Mobility: Croatia’s national carrier Croatia Airlines posted its strongest first-five-months result ever, carrying 775,000 passengers (+20% y/y), while the Croatian National Tourist Board opened a new Berlin office to strengthen ties with Germany’s biggest visitor market. Autonomous Transport: Uber plans a robotaxi programme in Munich with Autobrains and NVIDIA’s DRIVE Hyperion, pending German regulator approval—an EU mobility test that could reshape urban transport. Aviation & Travel Routes: Jet2 announced 30 new routes for summer 2027, including a new Edinburgh–Pula link from Croatia. Media Industry: WAN-IFRA welcomed new board members and re-elected Croatian digital publisher Zoran Turković to its supervisory board.

Defence & Industry Finance: Cyprus signed its SAFE defence programme loan agreement with the European Commission, unlocking EU funding for military hardware and “high-tech weapons” joint procurement—Cyprus becomes the sixth EU state to sign, after Poland, Lithuania, Croatia, Romania and Belgium. Energy Storage & Grid Rules: At Belgrade Energy Forum 2026, speakers pushed for clearer financing and regulation for battery energy storage systems in Southeastern Europe, arguing BESS must earn from both arbitrage and grid services as the market scales. EU Defence Funding Flexibility: The Commission says a second SAFE allocation could be possible if Italy cuts its planned loan request, with more member states potentially lining up for additional funding. Croatia Football & Logistics: Croatia continues World Cup preparations with a Belgium friendly in Rijeka, with coach Zlatko Dalić testing a 3-4-2-1 shape and planning heavy rotation. Healthcare R&D Funding: A €1.19m multinational RESOLVE project (Germany, Lithuania, Romania, Croatia) is exploring stem-cell extracellular particles to reset chronic neuropathic pain by targeting persistent neural inflammation. Croatian Publishing Industry: WAN-IFRA re-elected Ringier Media Switzerland CEO Ladina Heimgartner as president and added new board members including Zoran Turković, CEO of 24sata Hrvatska, representing Croatia’s digital publishers.

Croatian Infrastructure: Zagreb has launched a design competition for the Jarunski Bridge over the Sava, a 625m crossing that will reshape western-city transport and add a new tram link plus cycling and pedestrian lanes. Energy & Markets: Croatia’s inflation is expected to ease in May, with food and services cooling while energy remains the main risk factor; separately, fuel prices are forecast to drop in Croatia (petrol -€0.03/l, diesel -€0.05/l, and blue diesel -€0.06/l). EU Consumer Rules: The European Commission opened infringement steps against 20 Member States, including Croatia, over late or incomplete transposition of EU green-claims and sustainability-label rules. Digital Finance: At the Dubrovnik Economics Conference, Fed Governor Christopher Waller backed dollar-backed stablecoins as a payments tool, while the Bank of England’s Megan Greene argued tokenized deposits may overtake stablecoins. Construction & Design Debate: A Croatian engineer says “matchbox” architecture is driven less by creativity disappearing and more by cost, regulation, and investor timelines squeezing design freedom. Energy Storage: A SEE-focused panel at Belgrade Energy Forum said battery storage is moving from optional to necessary, but financing needs clearer regulation and transparent revenue streams.

Fuel & Transport: Croatia’s fuel pricing formula could bring relief soon: petrol down ~€0.03/l to about €1.61, diesel down ~€0.05/l, and blue diesel (used in agriculture and maritime) down ~€0.06/l to around €1.09, as global energy markets stay volatile. Agri Water Infrastructure: Work has started in Opuzen on phase two of an €85.5m Lower Neretva Valley project to stop seawater intrusion, adding a pumping station, freshwater intake, storage and 119+ km of pressurised pipelines to secure irrigation for ~2,000 hectares by 2030. Real Estate Market Rules: The government approved draft legislation to reform Croatia’s real estate market, aiming for more transparency and stronger consumer protection, including clearer standards for estate agencies and rules around viewings and commissions. Tourism Pressure: Croatia’s tourism pricing debate is heating up again, with experts warning that further price hikes could hurt competitiveness after years of rising costs. Central Banking & Crypto: At the Dubrovnik Economics Conference, Fed Governor Christopher Waller backed stablecoins as a payments tool while criticizing CBDCs; he warned stablecoins could effectively import US monetary conditions. Tourism Season Logistics: Croatia’s first major summer traffic test is underway with Statehood Day travel, and authorities are watching congestion on the A1 Zagreb–Dalmatia corridor.

Water & Agriculture Infrastructure: Work has started in Opuzen on phase two of the €85.5m Lower Neretva Valley freshwater project, adding a pumping station, distribution pipelines and storage to secure irrigation for about 2,000 hectares and cut salinisation risks, with completion targeted in four years. Monetary Policy & Inflation: At a Dubrovnik conference, IMF officials warned that central bank independence is under renewed strain as energy-driven inflation forces higher rates for longer and political pressure grows, making the anti-inflation fight harder. Real Estate Rules: Croatia’s parliament advanced reforms to the Trade Act for estate agents, aiming to boost transparency and consumer protection, including limits on tying viewings to agency arrangements and tighter rules around commissions and minors’ protections. Consumer Protection & Retail Compliance: Croatia approved a ban on energy drink sales to under-18s and strengthened age checks for alcohol, including online, while allowing local authorities to set alcohol sales hours. Tourism Branding & Demand: Croatia’s National Tourist Board is rolling out a new campaign fronted by John Malkovich, leaning into the Dalmatian idea of fjaka—selling a lifestyle, not just attractions. Croatia’s Summer Traffic Test: Statehood Day kicks off the first major 2026 coastal congestion wave, with heavy pressure expected on the A1 Zagreb–Dalmatia corridor.

Central Banking Pressure: Croatia’s central-bank independence is again under strain as policymakers push unpopular anti-inflation steps after an Iran-linked oil shock, raising the risk of higher borrowing costs for longer. Real Estate Rules: Croatia’s Parliament approved reforms to the Trade Act and real estate framework to boost transparency and consumer protection, including clearer standards for estate agencies and limits on tying viewings to agency arrangements. Alcohol & Energy Drink Controls: New laws let local authorities set alcohol sales hours, tighten age checks for alcohol and energy drinks (including self-service and online via e-Građani), and require refusal without valid ID. Public Health Focus: Croatia is among the EU’s heaviest smoking countries, with experts calling for better cessation support, stronger regulation, and more recognition of nicotine addiction in healthcare. Tourism Industry Strain: Hospitality faces a growing off-season problem as revenue remains concentrated in July-August, squeezing smaller coastal towns outside peak months. Economy Watch: Croatia’s GDP grew 2.2% in Q1 2026, extending a 21-quarter expansion streak, though growth eased versus late 2025. Consumer Safety Online: Authorities warn of rising tourism scams targeting Croatia, from fake listings to cloned booking sites. Energy & Infrastructure Politics: A Balkans gas pipeline concession bid tied to obscure players and US political connections highlights how energy deals are reshaping regional industry dynamics. Live Events & Culture: Hospitality On The Beach returns to Tisno (July 1-6) with a major drum & bass lineup, signaling continued investment in Croatia’s summer entertainment economy.

Tourism Fraud Watch: Croatia is seeing a rise in online tourism scams, from fake apartment listings using real photos to cloned booking sites that disappear after payment. Hospitality Off-Season Pressure: With summer still strong, many Croatian restaurants and cafés are struggling to survive the rest of the year as revenue concentrates in July and August. Croatian Economy: The country’s growth streak hit 21 consecutive quarters, with Q1 GDP up 2.2% year-on-year, led by household spending while investment cooled. EU Export Controls: The European Commission highlights how EU export controls under the dual-use framework are becoming more decentralized, with national measures increasingly shaping authorization rules around end-use and transaction context. Energy & Infrastructure (Varaždin): A €16m recreational pool complex is underway in Varaždin, backed by HBOR, with solar panels, solar thermal collectors and heat pumps planned. Governance & Justice: Croatia’s ex-transport minister Božidar Kalmeta was sentenced in a corruption retrial tied to transport-related cases.

Croatian Economy: Croatia’s GDP grew 2.2% in Q1 2026, extending a 21-quarter expansion streak, with household spending up 2.6% as the main driver while investment cooled to 2.5%. EU Consumer Rules: The European Commission opened infringement steps against 20 EU states, including Croatia, for not fully transposing the Directive on Empowering Consumers for the Green Transition. Transport & Corruption: Ex-transport minister Božidar Kalmeta was sentenced in Zagreb to a partially suspended 2.5-year prison term (10 months to serve) in the “Remorker” and “Croatian Traffic Renaissance” corruption retrial. Tourism & Infrastructure: Varaždin signed a ~€16m deal for a new energy-efficient recreational pool complex with solar tech and heat pumps. Road Travel: Croatia is pushing a shift toward fully electronic motorway tolling to cut summer queue chaos. Air Travel Demand: Croatian airports are preparing for another peak-season surge as international passenger growth continues. Industry/Business: Croatia’s tourism campaign adds John Malkovich, now a Croatian citizen, leaning on the Dalmatian “fjaka” lifestyle theme ahead of the World Cup.

EU Consumer Rules: The European Commission has launched infringement steps against 20 EU states, including Croatia, for failing to fully transpose the Directive on Empowering Consumers for the Green Transition—aimed at tougher standards for green claims and sustainability labels. Croatia Economy: Croatia’s GDP grew 2.2% year-on-year in Q1, driven mainly by household spending, while exports fell and imports edged down. Motorway Tech Upgrade: Croatia is pushing a major overhaul of its summer toll system, moving toward fully electronic collection to cut peak-season queues and bottlenecks. Tourism Capacity Watch: Croatian airports (especially Split and Dubrovnik) are preparing for another strong summer surge as airlines expand routes and passenger growth continues. Energy/Finance Policy: Croatia’s government unveiled anti-inflation measures including a tax on “excessive” profit margins and changes to flat-rate tourism taxation and short-term rentals.

Croatia Economy: Croatia’s GDP grew 2.2% year-on-year in Q1, driven mainly by household spending, while exports fell and the Economic Sentiment Indicator slipped to 103.3 in May. Anti-Inflation & Tourism Taxes: Finance Minister Tomislav Coric unveiled measures including a 50% tax on “excessive” profit margins, higher flat-rate taxes for some tourism providers, and abolition of pension taxation from next year. Food Industry: Croatia’s bakery sector is booming—over 900 operators, about €700m in annual revenue—yet profitability is under pressure from labor, energy and logistics costs. Defense & Industry: EuroTrophy says the Leopard 28A baseline with Rafael’s Trophy Active Protection System could expand across several European countries, naming Croatia among the expected users. Tech & Education: RIT Croatia in Zagreb opened enrollment for a new undergraduate Cybersecurity degree starting Fall 2026, targeting the growing demand for digital protection skills. Mobility Tech: Pony.ai reported Q1 robotaxi revenue surging 145% overall, lifting fleet targets to 3,500+ vehicles. EU Enlargement Watch: Cyprus’ deputy minister said EU member states may agree next month to open accession negotiations with Moldova and Ukraine.