Croatia Economic Growth Slows Further

Croatia’s economy expanded 1.7% year-on-year in second quarter of 2026, slowing from an upwardly revised 2.3% gain in the prior quarter and marking the weakest growth since a contraction in Q4 2020. Overall consumption growth eased to 0.9% from 1.9%, reflecting a sharp slowdown in household spending (0.5% vs 2.6%). Imports rose sharply (3.4% vs -0.3%), driven by higher purchases of goods (2.5% vs -1.1%) and services (7.8% vs 4.8%). Meanwhile, exports rebounded (3% vs -1.6%), supported by a 5.2% increase in goods shipments, offsetting part of the weakness in domestic demand. Government spending also rose sharply, rising 2% from 0.7%. On the production side, manufacturing activity stalled after a 1.1% increase, while wholesale and retail trade growth slowed to 0.8% from 1.8%. Professional and scientific services declined 0.6%, albeit at a slower pace than the 1.1% in the prior quarter. On a seasonally adjusted quarterly basis, the economy grew 0.4%, following a 0.1% contraction in Q1.

Croatia's economy expanded by 2.2% year-on-year in the first quarter of 2026, slowing from an upwardly revised 3.9% in the previous period and marking the weakest growth since a contraction in the fourth quarter of 2020. Government spending eased further (0.7% vs 2.8% in Q4 2025), while household consumption held steady at 2.6%. Net external demand also weighed on activity, as exports (-1.6% vs 1.5%) fell more than imports (-0.3% vs 0.3%). Gross fixed capital formation slowed to 2.5% from 7.0%. On the production side, growth softened in manufacturing (1.1% vs 6.4%), construction (2.8% vs 7.2%), wholesale and retail trade, transportation, storage, accommodation, and food service activities (1.8% vs 2.1%), and financial and insurance services (1.2% vs 2.9%). Meanwhile, stronger growth was seen in agriculture, forestry, and fishing (4.8% vs 1.7%) and public administration (3.0% vs 1.0%). On a seasonally adjusted quarterly basis, GDP was unchanged after a 1.2% rise in the previous period.

Croatia's economy expanded by 3.6% year-on-year in the fourth quarter of 2025, accelerating from a 2.3% growth in the third quarter. Household consumption picked up (2.6% vs 1.9% in Q3), while government spending increased further (4.7% vs 3.8%). Net external demand also contributed positively, as exports (1.5% vs -1.1%) rose more than imports (0.3% vs 2.4%). Meanwhile, growth in gross fixed capital formation slowed to 6.9% from 7.5%. On the production side, strong growth was recorded in manufacturing (6.4% vs 3.3%) and information and communication (4.2% vs 2.0%). On a seasonally adjusted quarterly basis, GDP increased by 1.4%, following a 0.4% rise in the previous period.