AGP Executive Report

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.

Cyber & Compliance: The EU Cyber Resilience Act kicks off mandatory incident and vulnerability reporting on Sept. 11, 2026, with penalties and possible product bans for unprepared firms. Auto & Capital Flows: Porsche has completed its exit from Croatia’s Bugatti Rimac and Rimac Group, pulling in about €1bn and lifting its 2026 cash-flow outlook. Defence Procurement: Croatia signed a €33.2m deal to upgrade Rafale combat communications (2026-2030), building a secure ground-to-air network with Thales. Trade Balance: Croatia’s exports rose to €16bn in Jan–Jul 2026 (+9.8%), but imports jumped to €28.6bn (+6.9%), widening the deficit to €12.6bn. Tourism Rules: The EU proposed an Affordable Housing Act that could lead cities to restrict short-term rentals like Airbnb in “housing stress” areas. Local Infrastructure: Zagreb opened Bazen Špansko, a €36.3m sports centre with the city’s first municipal pool in the west. Waste Crisis: USKOK-linked expert findings point to microplastics at waste sites near Benkovac and Gospić, keeping pressure on authorities. Business Expansion: DIDWW expanded A2P SMS to Croatia, Romania, Belgium and Norway, bringing coverage to 53 countries. Energy & Industry Links: Agro Simpa plans a bee-feed factory in Odesa with Ukrainian partner VRM AHRO (2,000 tonnes/year).

Tourism Tech: Meet Croatia launched a new digital platform to centralize Croatia’s fragmented tourism market, letting international travelers book stays, marine charters, dining and tours in one place. EU Procurement: The European Commission is set to unveil new public procurement rules, reigniting the “European preference” debate over whether EU buyers should prioritize European suppliers. Dubrovnik Connectivity: Air Canada’s planned Dubrovnik–Montreal route from May 2027 (three weekly flights in summer) targets stronger North American demand and easier connections. Infrastructure & Culture: Zagreb’s Croatian National Theatre is moving into renovation planning after decades, with two bids received for conceptual design work. Waste & Accountability: Croatia’s hazardous waste crisis keeps escalating, with new reporting questioning how much waste the country imports and how hazardous material can slip through legal channels. Property Market: Zagreb new-build home prices surged again, with the latest figures pointing to renewed momentum in the capital’s real estate market. EU Enlargement Watch: The IMF says EU candidate countries must deliver broad economic reforms to benefit from accession, with productivity at the center of the gains. Education Signal: OECD PISA results show 15-year-olds’ reading, maths and reasoning are at the weakest levels in decades, adding pressure for skills-focused policy.

Croatian Jobs Pulse: Croatia’s pension-insured workforce keeps growing: HZMO counted 1,797,071 insured people at end-August, up 16,263 year-on-year (+0.91%), with the biggest employment bases in wholesale/retail (249,991), manufacturing (242,489) and construction (155,135). Defence & Industry: Croatia approved a €544.05m (incl. VAT) deal for 18 South Korean Chunmoo K239 multiple-launch rocket systems, with Hanwha supplying launchers/ammunition and WB Electronics handling command-and-control integration (2026-2029). Tourism Seasonality: Croatia remains the EU’s most seasonal destination: 54.5% of all tourist nights in 2025 landed in July-August, far above the EU average (31.1%). Education & Skills: OECD’s PISA 2025 shows 15-year-olds’ reading and maths at record lows; in the EU, Croatia is among countries scoring below the OECD average. Heritage Investment: Etnoland near Šibenik is set to open a €6.29m immersive Dalmatian heritage attraction with a new 360° multimedia show and monumental sculptures. Robotaxi Push (Regional Tech): Pony.ai’s CEO says robotaxis could be widespread within five years and points to expansion that already includes Zagreb.

EU Values Clash: European leaders condemned the huge public funeral of convicted war criminal Ratko Mladić in Belgrade, warning it risks undermining Serbia’s EU path. Croatia–EU Politics: Croatia’s PM also hit back at EU leaders over the Mladić commemoration, keeping the Western Balkans’ political tensions front and center. Defense & Industry: Croatia approved a €544m deal to buy 18 South Korean Chunmoo multiple-rocket launchers (2026–2029 deliveries), replacing older systems. Tech & Jobs: Osijek firm GAUSS plans a ~€5m Vukovar facility to develop and produce AI-enabled unmanned systems, aiming to start operations in Q2 next year. Real Estate: New-build prices keep climbing—Zagreb new apartments average ~€3,518/m² (+18.9% y/y). EU Consumer Costs: A new EU handling fee on small parcels from outside the bloc is set to start 1 Nov 2026, potentially raising online shopping costs in Croatia. Tourism Signals: Župa Dubrovačka saw more arrivals but fewer overnight stays in 2026, while Dubrovnik’s nautical tourism cooled in August. Environment & Protests: Tens of thousands protested in Zagreb over illegal toxic waste stored in Lika, demanding faster cleanup action. Diaspora Funding: Croatia’s state office announced €3.3m for non-profits supporting Croats abroad, including cultural and language projects.

Toxic Waste Crisis: Tens of thousands marched in Zagreb demanding action over 34,000–37,000 tonnes of illegally stored waste near Gospić, after repeated government promises failed to turn into on-the-ground cleanup. Regulatory Pressure: USKOK findings flagged environmental risks at waste sites in Varaždin and Gospić, including microplastics in groundwater, adding fuel to the protests. Croatian Housing Boom: New-build apartment prices keep climbing—Croatia averaged €2,994/m² in Jan–Jun (+8.7% y/y), while Zagreb surged to €3,518/m² (+18.9%). EU Online Shopping Costs: The EU plans a new handling fee for small parcels from outside the bloc, potentially raising costs for frequent low-value online shoppers in Croatia from 1 Nov 2026. Tourism Shift: Župa Dubrovačka saw arrivals rise (+1.6%) while overnight stays fell (-1.66%), and Dubrovnik’s nautical tourism cooled in August (overnights down ~7%). Aviation & Trade Links: Air China launched a year-round Beijing–Bucharest–Zagreb route (3x weekly), positioning it as a bridge for tourism and business ties. Defense Procurement: Croatia approved a €544m deal for 18 Chunmoo rocket launchers from South Korea, with deliveries planned for 2026–2029.

Education & Youth: Croatia’s Education Minister Radovan Fuchs kicked off the new school year urging pupils to be “curious, brave and persistent,” telling them mistakes are part of learning and praising teachers as a pillar of the country’s future. Tourism Regulation: Brussels is moving toward tougher rules on short-term rentals as Croatia already tightens tourist apartment controls, raising the question of who will pay the price as housing pressure grows in hotspots. Transport & Infrastructure: Croatia is set to replace motorway toll booths with Crolibertas from March 1, 2027, using fully electronic free-flow collection while keeping distance-based tolls by vehicle category. Environment & Public Pressure: Tens of thousands protested in Zagreb over illegal toxic waste stored near Gospić in Lika, with claims of around 35,000 tonnes and alleged €4m profits from falsified documents; protesters demand a national waste plan within 20 days and an import moratorium. Local Business & Consumer Costs: A Dubrovnik visitor was charged €175 for parking after missing a 15-minute window to buy a €40 daily ticket, reigniting complaints about how the system is communicated. Aviation & Connectivity: Air Canada announced new international expansion including a first direct Montreal–Dubrovnik link from May 11, 2027, ending decades without a nonstop Canada route. Sports & Entertainment: Croatia’s Andi Vrtačić won by TKO at BRAVE CF 108 in Pula, while Lasha Abramishvili also secured a major win in the same event.

Hazardous Waste Crisis: Tens of thousands marched in Zagreb demanding urgent cleanup of an illegal toxic waste dump in Croatia’s Lika region near Gospić, where about 35,000–37,000 tonnes of medical and electronic waste are alleged to have been imported from Italy, Germany and Slovenia; protesters want a national waste-management plan within 20 days, a temporary halt on waste imports, and clear remediation deadlines after soil contamination and “forever chemicals” (PFAS) were flagged. Tourism & Housing Rules: Brussels is preparing tougher EU-wide limits on short-term holiday rentals as Croatia already tightens tourist apartment rules—raising the question of who pays the price as property affordability worsens in tourism hotspots. Road Toll Tech: Croatia plans to replace toll booths with fully electronic Crolibertas from March 1, 2027, keeping distance-based charging but aiming to cut queues and emissions. Aviation & Trade Links: Air China launched year-round Beijing–Zagreb service, while Air Canada expands Canada–Dubrovnik nonstop flights from May 11, 2027. Business & Industry: EcoCortec says its VpCI packaging can cut plant washing steps, lowering energy use and waste. Regional Business Watch: The Israeli Chamber of Commerce opened an office in Banja Luka, strengthening ties with Republika Srpska amid wider international criticism of Israel’s Gaza war.

Toxic Waste Crisis: Tens of thousands marched in Zagreb demanding urgent cleanup of hazardous waste illegally dumped near Gospić, with protesters calling for a moratorium on imports and a national waste plan within 20 days amid claims of soil and groundwater contamination. Energy & Industry Policy: The Croatian government is preparing an autumn package of measures, with nuclear power among topics, after August inflation picked up to 4.1% driven by energy prices. Public Transport Electrification: Zagreb rolled out 62 new electric buses for ZET (30 standard, 26 articulated, 6 midi) plus expanded charging infrastructure, with EU and city funding covering nearly €56.8m. Fuel Costs Watch: Croatia’s diesel prices could jump sharply next week as oil markets react to renewed Iran-related shipping and supply risks. Business & Trade: Croatia’s bank profits fell 5.5% as a strong first quarter unwinds, while fiscalised receipts in August rose to €6.56bn, signaling continued consumer spending momentum. Global Business Spotlight: Air Canada announced a major 2027 expansion including a new seasonal Montréal–Dubrovnik route starting May 11, 2027. Sports & Media Business: BRAVE CF 108 in Pula added a vertical 9:16 live broadcast format and a sportsbook partnership, showing how sports promotions are monetizing new viewing habits.

Environmental Crisis in Croatia: Tens of thousands marched in Zagreb demanding urgent cleanup of the illegal hazardous waste dump near Gospić in Lika, where authorities say more than 30,000 tonnes were buried and protesters fear contamination and “forever chemicals” in soil and groundwater. Public Transport Electrification: Zagreb’s ZET rolled out 62 new electric buses (30 standard, 26 articulated, 6 midi) plus expanded charging infrastructure at Podsused, with EU and city funding totaling nearly €56.8m. Energy Costs: Croatia’s fuel market faces a potential diesel jump next week as Iran-related tensions keep oil prices volatile, with diesel forecast to rise sharply at the pump. Aviation & Tourism Links: Air Canada announced major 2027 expansion, including a new seasonal nonstop Toronto–Dubrovnik route from May 11, boosting direct Canada connectivity after decades. Defense Modernisation: Croatia approved a €544m deal for 18 South Korean Chunmoo K239 multiple rocket launchers as part of wider military upgrades. Business & Jobs (Canada, Croatia Industries): Ottawa pledged $11.6m for tariff-response projects in Saskatoon, including Croatia Industries, aimed at automation, new markets and job support.