AGP Executive Report

Energy & Infrastructure: JANAF and Hungary’s MOL signed a take-or-pay deal for 2.05 million tonnes of crude oil transport via the Adriatic pipeline in 2026, with the contract retroactive from 1 January and renewed debate over capacity and tariffs. Retail Demand Watch: Eurostat data show eurozone retail sales fell 0.3% month-on-month in June 2026 (EU -0.1%), while year-on-year growth eased to +0.7% in the euro area. Gaming Expansion in Croatia: EGT installed 170 new slot cabinets across 44 OlyBet venues in Croatia, upgrading major sites in Split and Dubrovnik with Supreme S 55 S ST machines. Tourism (Nautical): Dubrovnik’s nautical segment held up in July with 8,556 arrivals (about 2% down), but the year-to-date picture remains weaker on overnight stays. Tech & Mobility: Uber says it’s building the infrastructure to commercialise autonomous mobility globally, with self-driving operations live in seven cities including Zagreb. Business Climate Risk: A Europe-wide heat wave pushed Italy’s major cities to red alert and disrupted energy and transport, underlining rising operating risks for businesses and tourism.

Energy & Water Security: Croatia’s drought-hit rivers and hydropower output are raising questions about electricity and water supply, with Hrvatska vode saying household supply isn’t currently threatened while the Krško nuclear plant plans to cut reactor power to 80% at night to manage Sava temperature and flow. Local Jobs & Tourism: Dubrovnik-Neretva County employment jumped to 36,241 in March 2026—up nearly 2,700 year-on-year—as hotels, restaurants and tourism-linked firms ramp up hiring for the summer season. Heatwave Shock Across Europe: Austria set a new record 41.2°C as a wider heatwave and drought strain grids and trigger wildfires; Hungary curbed power use amid pressure on the electricity system. Regional Energy Investment: Estonia’s Bioforce secured a major Three Seas Investment Fund backing to expand biomethane capacity across the Baltics and into Poland—part of the broader clean-gas push. Croatia’s Infrastructure Ambition: Croatia Ring near Slunj moved closer to reality after being added to the state’s strategic investment list, with an FIA-standard track envisioned for major events including potential F1. Startup & Space Tech: GapMinder co-invested €1.2M in Croatian startup Genesis Space Flight Laboratories to develop reusable space capsule technology and launch early commercial missions. Sports Business & Culture: Croatia marked Operation Storm’s 31st anniversary with top officials at Knin ceremonies, while regional tensions with Serbia stayed in the spotlight.

Croatia’s Motorsport Push: Croatia Ring near Slunj is now on the list of strategic state investment projects, with a 3.6 km FIA-standard track planned on a 50-hectare site—aimed at year-round events and possible future F1 hosting. Tourism & Overtourism Management: Dubrovnik earned fresh BBC World Service attention for balancing visitor flows with residents’ quality of life, including AI tools and housing policies to keep people living inside the UNESCO core. Aviation & Travel Demand: Croatia Airlines’ first-half losses surged to record levels, despite passenger numbers nearing one million—fuel and finance pressures are driving the hit. Energy & Industry Under Pressure: Heatwave drought is pushing water and power constraints across Europe; in Croatia’s region, Istria’s water utility issued a final warning on non-essential use as distribution networks near their limits. Startups & VC: GapMinder co-invested €1.2M in Croatian startup Genesis Space Flight Laboratories to develop reusable space capsule tech and expand mission operations. Climate Tech & Geothermal: ENNA Geo completed new geothermal surveys at Babina Greda to better define the reservoir and plan further development. Business Climate Risk: A World Bank report flags AI job displacement risk as far higher in high-income economies than in lower-income ones. Bioenergy Investment: Three Seas Investment Fund backed Estonia’s Bioforce to massively expand biomethane capacity across the Baltics—demand growth is the driver.

Danube Drought Shock: Record-low water levels on the Danube are exposing WWII German warships and other wrecks near Prahovo, while drought also threatens hydropower and cooling water for nuclear plants across the region. Energy & Water Pressure in Europe: Heat and drought are forcing emergency measures on drinking water, electricity demand and inland transport, with governments scrambling to keep systems running. Croatia Logistics Deal: Slovak Railtrans International and Croatia’s HŽ Cargo are forming a joint venture for intermodal freight linking Adriatic ports with Central Europe, targeting 500,000 tonnes by 2028. Croatian Tourism Uptick: Croatia’s eVisitor data points to a rebound from key markets—Czech arrivals and overnight stays up, with Hungary and Italy also showing stronger numbers. Croatia Airlines Financial Strain: Croatia Airlines’ first-half losses are worsening as fuel and financing pressures add to renewal costs, despite passenger volumes nearing one million. Infrastructure & Mobility: Croatia is moving ahead with major road and transport projects, including a new A7 motorway section contract and plans to expand electric bus charging capacity in Dubrovnik.

Croatia–EU Transport & Logistics: Slovak Railtrans International and Croatia’s HŽ Cargo are forming a joint venture for intermodal freight, aiming to move 500,000 tonnes via Croatian Adriatic ports by 2028 and strengthen Croatia’s role as a Central Europe gateway. Tourism Demand: Croatia’s eVisitor data points to a rebound in key markets: Czech arrivals up 12% in July (overnight stays +7%), with Hungary (+8% arrivals, +7% stays) and Italy also showing modest growth in the first seven months. Road Infrastructure: Croatian Roads says the Dubrovnik–Čilipi airport express road is progressing: a new preferred route has been agreed in principle (the Ombla River option dropped), with further studies and an environmental impact assessment expected after September. Energy & Climate Pressure: Europe’s heat and drought are stressing water, power and agriculture, while the Danube’s record lows are also disrupting transport and exposing WWII wrecks. Business & Regulation Watch: Croatia is completing the shift from paper driving licences to the EU card format with added security features and machine-readable data. Regional Politics: Serbia’s President Vučić again framed great-power interests as clashing in the Balkans and linked the message to regional stability and independence concerns.

Croatian Rail Innovation: Končar is driving a new era of rail transport with domestic high-tech trains, with over 70 low-floor units delivered and new battery-electric train plans plus a hybrid charging station in Kotoriba. Tourism Prices & Debate: A viral pizza receipt from Stari Grad on Hvar reignited arguments over coastal pricing and whether restaurants are “too expensive” or simply transparent. Local Retail Expansion: Dutch discount retailer Action opened its 4th Croatian store in Kaštel Sućurac near Split, bringing about 6,000 products and a large share priced under €2. Dubrovnik Visitor Boom: Dubrovnik says the US is now its top international market by arrivals (125,830 Americans in Jan 1–Jul 27), boosting overnight stays and long-haul demand. Business Planning for Taxes: Croatia’s Chamber of Trades and Crafts (HOK) launched a free calculator to help sole traders estimate 2027 tax and social contribution changes. EU Policy & Energy: The European Commission approved Slovenia’s €59m battery storage scheme and also backed fuel aid for Italian fishing/aquaculture firms. Regional Pressure Points: Heat and drought are stressing water, power and transport across Europe, while the Danube’s record lows are triggering serious water-management crises in Serbia. Animal Welfare Debate: Zagreb Zoo’s lioness death has sparked renewed public debate over how zoos are funded and whether public money should support animal captivity.

Croatia Airlines: The carrier carried nearly 1 million passengers in H1 2026, but losses hit a record €49.7m as fuel and exchange-rate pressures piled onto fleet renewal costs. Maritime Tourism & Infrastructure: ACI Marinas reported solid H1 results (revenue €17.4m, EBITDA €4m) ahead of peak season, while Dubrovnik is pushing an electric bus charging hub and expanding green space with new trees. Local Economy & Taxes: Croatia’s crafts chamber (HOK) launched a free online calculator to help sole traders estimate 2027 tax and social contribution changes. AI & Energy Policy: The EU opened tenders for up to seven AI Gigafactories (up to €10bn public support) and approved Slovenia’s €59m battery storage scheme for at least 370MWh. Tech & Mobility Deals: Hrvatski Telekom completed its PRO-PING acquisition to expand broadband in rural areas, and Croatian satellite software specialist Amphinicy Technologies was acquired by ETL Systems. Tourism Logistics: Dubrovnik faced another Old City delivery bottleneck at Ploče Gate, renewing calls for clearer vehicle height limits. Border & Waste: After a Croatia–Montenegro traffic gridlock, Konavle’s cleanup teams collected over 8 cubic metres of rubbish. Climate & Business Risk: Record-low Danube levels are disrupting transport and power generation across the region, with drought-driven strain also hitting Hungary’s electricity supply.

Telecom & Connectivity: Hrvatski Telekom has completed its acquisition of PRO-PING, a regional broadband provider focused on rural areas, after getting the needed approvals—no customer changes expected, but more push toward gigabit networks. Tourism Demand: Croatia’s tourism bounced back in July after a softer June, with preliminary data pointing to about 1% growth in arrivals and overnight stays and roughly 1.08 million visitors hosted daily. Energy & Climate Risk: Hungary faces potential power cuts as Danube water levels hit record lows, forcing its Paks nuclear plant to stop generating and raising pressure on electricity use. AI Infrastructure Push (EU): The European Commission opened the race for next-generation AI “Gigafactories,” aiming to unlock over €30bn total investment with up to €10bn in public support. Trade & Industry: The EU imposed definitive anti-dumping duties of up to 67.5% on Chinese nylon yarn, targeting price undercutting that threatens local producers and jobs. Croatia in the Wider Tech Race: Chinese autonomous driving firm WeRide is entering Denmark via GreenMobility, with plans for a robotaxi service in 2027. Transport & Logistics: Drought-driven Danube lows have exposed WWII-era Nazi wrecks and disrupted river shipping, adding safety and navigation concerns. Mobility & Travel: Oman introduced a free 14-day tourist visa category for selected countries, with the eligible list still to be published. Croatia’s Aviation: Croatia Airlines neared one million passengers in the first half of 2026 despite a large net loss, as capacity and load factors improved.

Croatian Tourism: Croatia’s tourism rebound is gaining speed again in July, after a softer June, with preliminary data pointing to about 1% growth in arrivals and overnight stays year-on-year and roughly 1.08 million visitors hosted daily. Public Procurement & Maritime Assets: Croatia’s Hydrographic Institute is putting its retired research vessel Palagruža up for public sale via bidding, with a starting price of €119,000 (VAT excluded); the ship still has specialist labs and equipment but has been out of service since April 2024. Labour & Migration Screening: A court case over a denied work permit on Korčula is reigniting debate about Croatia’s security checks for foreign workers, as thousands of permits are issued in the Dubrovnik-Neretva area and refusals remain a small share but opaque. EU Trade Protection: The European Commission has imposed definitive anti-dumping duties of up to 67.5% on Chinese nylon yarn, targeting price undercutting that threatens local producers, including in Croatia. Energy & Infrastructure: Croatia and Hungary plan to double capacity of their cross-border gas interconnector, while the EU pushes major AI “Gigafactories” funding to expand computing capacity. Business Aviation: Croatia Airlines reported its best-ever first half, nearing one million passengers, despite continued large losses. Heatwave Impact: Record-low Danube levels are exposing WWII-era wrecks, including a 1937 shipwreck near Croatia, underlining how drought is disrupting shipping and tourism.

Croatia Airlines: The national carrier carried a record 981,482 passengers in the first half of 2026, nearing one million, but still logged a net loss of €49.7m as costs and fleet renewal weigh on results. Energy & Industry: INA confirmed a major new natural gas find in the northern Adriatic with the Ana-4 DIR well, reporting initial output of about 160,000 cubic metres per day and a €65m five-well investment cycle. Circular Economy: Croatia’s deposit return scheme is set for its biggest expansion since launch: from Jan 1, 2027, deposits will cover multilayer cartons (Tetra Pak) and smaller beverage containers under 200ml, though retailers and producers warn they’re not ready for the logistics. Labour Market: In Dubrovnik-Neretva, authorities issued 56,662 residence and work permits since 2021 (with 742 refusals), as Croatia faces growing demand for foreign workers and tighter security screening. Business Climate: Fitch reaffirmed Croatia’s A- rating, citing resilient growth and disciplined public finances, while flagging weak productivity and tourism dependence as long-term risks. Local Economy Spotlight: A 20m² Zagreb shop, Keks Point, is turning American-style cookies into a niche business with daily production and a single-product focus. Transport & Tourism Infrastructure: Croatia is moving ahead with major road and public transport upgrades, including an A7 motorway contract and new electric bus charging capacity in Dubrovnik.

Croatia’s Credit Boost: Fitch reaffirmed Croatia’s “A-” sovereign rating, citing resilient growth and disciplined public finances, but warned on weak productivity, rising labour costs and tourism dependence. Energy & Industry: INA confirmed a major natural gas find in the northern Adriatic, with the Ana-4 DIR well delivering strong initial flow rates as a €65m drilling cycle moves ahead. Transport Upgrade: Dubrovnik unveiled a €1.14m charging hub for its first electric bus fleet, with 12 new e-buses due by mid-August under a wider €9.57m modernisation plan. Tourism Labour & Security: In the Dubrovnik region, 56,662 residence/work permits were issued since 2021 to July 28, 2026, while 742 were refused after security checks tied to social media scrutiny in a new court case. Circular Economy Push: Croatia’s deposit return system expands from Jan 1, 2027, adding Tetra Pak-style multilayer cartons and smaller beverage containers, but retailers warn they’re not ready for the logistics. Service Sector Snapshot: Croatia’s service activity rose in May (turnover +5.8% y/y), led by film/TV (+28.4%) and accommodation/food (+11.2%), while one industry saw a sharp 12% drop. Infrastructure Deal: Croatia signed a €250m contract for the Jadranovo–Selce A7 motorway section, a key Adriatic link to improve safety and traffic flow. AI Investment Signal: Goldman Sachs says AI infrastructure spending is broadening beyond big tech, with enterprise and sovereign projects (including Croatia mentioned among countries launching AI initiatives).

Energy & Industry: INA confirmed a major new natural gas discovery in the northern Adriatic, with the Ana-4 DIR well producing about 160,000 cubic metres per day across three reservoirs; the €65m five-well campaign is now moving to connect the well to existing infrastructure for extended testing. Circular Economy: Croatia’s bottle deposit return system is set for its biggest overhaul since launch: from 1 Jan 2027 the 10-cent deposit will cover multilayer cartons (Tetra Pak) and beverage containers under 200ml—though retailers warn they lack reverse-vending capacity and recycling facilities. Transport & Infrastructure: Croatia signed a €250m contract for the Jadranovo–Selce section of the A7 motorway (12.3 km), a key Adriatic link aimed at improving traffic flow and safety. Public Transport Modernisation: Dubrovnik unveiled a €1.14m charging hub for electric buses, paving the way for 12 new e-buses by 20 August and a wider fleet upgrade. Aviation & Tourism Demand: Croatia Airlines reported its strongest first-half passenger result ever—981,482 travellers (+15%)—as it continues major fleet renewal and expands Star Alliance A220 operations. Business Climate Watch: Croatia’s service sector grew in May (+5.8% turnover y/y), but one segment fell sharply: film/video/TV production surged while other industries showed uneven momentum. EU Policy: New EU right-to-repair rules start applying across the bloc on 31 July 2026, strengthening repair over replacement—impact will depend on national rollout.

Croatia Airlines Fleet & Alliances: Croatia Airlines says it has taken delivery of the world’s first Airbus A220 in Star Alliance livery, bringing its A220-300 fleet to nine and targeting up to 15 aircraft. Energy Infrastructure: Plinacro and Hungary’s FGSZ agreed to double capacity on the Croatia–Hungary gas interconnector at the Drávaszerdahely–Donji Miholjac border point, from 200,000 to 400,000 standard cubic meters per hour from Dec 31, 2026. Tourism & Consumer Protection: Croatia is preparing taxi fare caps under amendments to the Road Transport Act to curb excessive summer charges and improve price transparency for passengers. Continental Tourism Investment: A €20m renovation of Daruvar Spa aims to boost year-round health and wellness tourism, funded partly via Croatia’s National Recovery and Resilience Plan. Macro & Prices: Eurozone inflation ticked up to 2.9% in July; Croatia recorded 3.6%, among the higher rates in the bloc. Right to Repair: EU right-to-repair rules start applying across member states from July 31, but impact will depend on national rollout. Agriculture & Biosecurity: Finland confirmed its first African swine fever case in a wild boar; the disease has already led to culls and trade restrictions across Europe, including Croatia. Business & Markets: EU opened an anti-dumping probe into Chinese nylon, citing dumped prices that could affect Croatia’s nylon industry. Geothermal Progress: ENNA completed 3D seismic and magnetotelluric surveys at the Babina Greda geothermal site to better define reservoir potential. Lifestyle & Local Preferences: A new survey says 81% of Croatians drink wine and 90% prefer domestic producers.

Tourism & Transport: Croatia is moving to cap taxi fares from 31 July, with maximum prices set for starting fees, per-kilometre rates and waiting/per-minute charges to curb summer overcharging. Continental Tourism Investment: A €20m overhaul of Daruvar Spa aims to push Croatia’s health-and-wellness offer beyond the Adriatic and build year-round demand. Aviation & Connectivity: Croatia Airlines received its 10th Airbus A220, the first A220 in the world in Star Alliance livery, supporting its fleet renewal. Regional Trade: Bosnia and Herzegovina’s foreign trade rose 5.33% in H1 2026, but the trade deficit widened as imports grew faster than exports. Energy & Infrastructure: Plinacro and FGSZ agreed to double gas interconnection capacity with Hungary from 31 Dec 2026. AI & Industry (EU): The EU launched bidding for up to seven AI gigafactories, but the public funding share is small and chip supply is tied to US firms. Climate Pressure: Record-low Danube levels are disrupting shipping and tourism across the region, with heatwave-driven drought worsening conditions. Tourism Brand Boost: Croatia was shortlisted for UK reader travel awards, including “Most Desirable European Country.” Airline Expansion: Air Serbia will make Belgrade–Dubrovnik year-round with winter flights.

FIFA vs UEFA Standoff: UEFA says it will boycott FIFA competitions if FIFA pushes its $20bn FIFA Forward Enterprise plan to sell a stake in World Cup commercial operations, warning the tournament “is not for sale.” Croatian Energy Link: Plinacro and FGSZ agreed to double gas interconnection capacity at Drávaszerdahely/Donji Miholjac from 200,000 to 400,000 Sm³/h from 31 Dec 2026, boosting regional supply security. EU AI Push: The European Commission launched a €10bn drive to build AI Gigafactories across Europe, aiming to attract at least €20bn in private investment for next-gen AI infrastructure. Heatwave Pressure on Trade: The Danube has hit “historic lows,” leaving barges stranded and raising wildfire and drought risks across the Balkans, with knock-on effects for shipping and industry. Tourism & City Economy: Croatia was shortlisted for major UK travel awards, while Dubrovnik is expanding green space with 62 new trees and is again in the spotlight after Netflix’s Outer Banks filmed in the Old City. Air Connectivity: Air Serbia will make Belgrade–Dubrovnik year-round, adding winter flights (3 per week). Local Governance: Zagreb approved a €3.4m makeover of Stara Vlaška into a permanent pedestrian-friendly shared space. Maritime Enforcement: Croatia’s Safe Navigation 2026 operation logged 382 inspections, 182 breaches, and €79k in fines.

Danube & Heatwave Impact: Plummeting Danube levels in Serbia have already halted shipping and disrupted fuel imports and energy production, as a long heatwave is expected to push temperatures toward 40°C and raise wildfire risk across the Balkans. Croatia’s Energy & Industry Pulse: Croatia’s industrial output grew 4.3% year-on-year in June, the first rise in three months, with intermediate goods leading. Tourism Cash Register: Croatia’s Adriatic hospitality revenue climbed 12% in the first 26 days of July, while accommodation turnover rose 15%, according to fiscalisation data. Transport Costs Watch: New rules aim to improve taxi price transparency after wide fare differences across Croatian cities. Outsourcing Talent Edge: A global outsourcing study highlights Croatia’s standout English skills as a key competitive advantage for international services. Energy Security Angle: Romania’s energy exposure is shifting from Russia dependence to broader Black Sea, LNG and transport-route risks as Europe heads into autumn-winter with low gas storage. Wildfire Tech & Aviation: Airbus is accelerating A400M work to support firefighting missions, with Croatia among NATO partners backing a multinational fleet initiative.