AGP Executive Report

Robotaxi Momentum: Pony AI lifted its 2026 robotaxi fleet target by 500 vehicles to 3,500 after Q1 revenue jumped 145% to about $34.3M, with robotaxi services revenue up 395% and fare-charging surging as it rolls out its Gen-7 fleet. Energy Diplomacy: Croatia and North Macedonia signed an agreement to upgrade energy cooperation, with a focus on security and regional interconnections. EU Waste Crackdown: Eurojust coordinated action against an illegal waste-trading network spanning Italy, Austria, Croatia, Germany and more, targeting toxic ash sold as “eco-friendly” charcoal and other products. Tourism & Jobs: Croatia’s summer season is set to hire roughly 65,000 students, while workforce change is accelerating as foreign labor fills gaps in hospitality and logistics. Transport Links: Croatia Airlines launched Dubrovnik flights, and Zagreb plans 20 new low-floor trams in a €75M upgrade. World Cup Build-Out: FIFA confirmed base camp training sites for all 48 teams, with Croatia in Group stage planning alongside Canada and Panama.

Robotaxi Boom: Pony AI says Q1 revenue jumped 145% to $34.25M, with robotaxi services revenue up 395% as it scales paid Gen-7 operations and pushes its 2026 year-end fleet target above 3,500 vehicles. EU Budget Fight: EU ministers are shifting from “principles” to hard spending numbers in the MFF talks, as net contributors clash with the “Friends of Cohesion” bloc demanding more money for cohesion, agriculture and fisheries. Nuclear vs Data Centers: Ten-plus EU countries, including Croatia, are urging the Commission to treat nuclear as clean for data centers—warning draft rules could choke investment in the AI power rush. Croatia Tourism & Transport: Croatia’s tourism board is rolling out a John Malkovich campaign, while Zagreb plans €75M for 20 new long low-floor trams and Croatia Airlines adds a Dubrovnik–Stuttgart route. World Cup Logistics: FIFA confirmed base camps for all 48 teams, with Ghana set for Boston and Ronaldo-backed CazéTV preparing free 4K streaming of all 104 matches in Brazil.

Aviation & Tourism Boost: Croatia Airlines has launched a new seasonal direct route between Dubrovnik and Stuttgart, running twice a week (Mondays and Fridays) until 23 October 2026, with one-way tickets starting around €131—another push for Germany’s steady stream of visitors. On-the-Ground Costs: As the coast heats up, Croatia’s summer parking prices are rising fast, adding friction for both tourists and locals in old towns and beach hotspots. Travel Demand Shift: More visitors are exploring by boat—small rentals, self-drive vessels and day charters—because people want space and fewer crowds. Digital Security Warning: A new Android scam using fake apps is quietly charging premium fees via carrier-based billing, with reports including Croatia. Policy & Industry Signals: Croatia and South Korea are discussing deeper trade, energy and port cooperation, including potential links between Rijeka and Busan.

AI Ethics Push: Pope Leo XIV will release his long-awaited AI manifesto “Magnifica Humanitas” at the Vatican on Monday, warning against militarised AI and the “replacement of reality by simulation,” with Anthropic’s co-founder among the experts. Balkan Strategy Shift: The US says it’s moving from “nation-building” to “mutually beneficial partnerships,” with Corridor 8 flagged as a strategic priority linking the Adriatic and Black Seas. Croatia–Korea Trade & Ports: In Seoul, Croatia’s FM Gordan Grlić Radman met South Korea’s Cho Hyun to expand cooperation on defence, energy, trade, and port logistics, including potential Port of Rijeka–Port of Busan links. Dubrovnik Funding: The Croatian government approved a €44.6m loan for Dubrovnik projects through 2028, from schools and sports halls to park-and-ride and a bus station plan. Cost Pressure at Home: Croatia’s retailers are on alert as food prices rise and consumer spending cools, while air-conditioning servicing costs jumped ~25% versus 2024.

AI Ethics Push: Pope Leo XIV will release his long-awaited AI manifesto “Magnifica Humanitas” at the Vatican on Monday, with a focus on ethics, inequality, digital literacy and the risks of military AI—featuring experts including Anthropic’s co-founder amid a legal fight over Claude’s use in lethal and surveillance roles. Croatia–Korea Diplomacy: Croatia’s foreign minister Gordan Grlić Radman met South Korea’s Cho Hyun in Seoul to expand cooperation in arms, energy and batteries, plus public safety and education exchanges. Tourism Security: Croatia’s summer season is getting hit by fake booking scams, with hacked hotel listings and fraudulent links used to siphon card details. Agriculture Costs: EU fertiliser prices jumped 8% year-on-year in Q4 2025, adding pressure to farmers—Croatia is among the few countries seeing declines. Retail Pressure: Croatia’s grocery prices are back in the spotlight as consumers compare weekly “basket” costs and demand answers. Sports & Culture: Djokovic rallied to beat Giovanni Mpetshi Perricard in the French Open opener, while Croatia’s donkey-shelter tourism content keeps going viral.

Tourism Cybercrime: Croatia’s summer rush is colliding with booking fraud. Hotels and private hosts report hacked listings, fake reservations, and phishing links that try to steal card details—one Pula family-run hotel says hackers inserted a link and generated 116 reservations overnight during Easter, with staff quickly warning guests. Seasonality Shift: Southern Europe is trying to turn off-season into a growth engine, but Croatia still leans heavily on peak summer demand (alongside Greece), even as early signs suggest some shoulder-period extension. EU Politics & Security: An EU Parliament foreign affairs delegation heads to South Africa to deepen ties and discuss the Global Gateway push, while NATO ministers set up the Ankara summit around the 5% spending target, Ukraine support, and Hormuz security. Environment & Food Integrity: Croatia’s food waste problem is still not improving under EU targets, and olive oil fraud concerns are rising as consumers are urged to check labels and origin. Adriatic Reality Check: Dubrovnik’s traffic gridlock and shifting visitor mix (Americans up, Brits down) are becoming part of the tourism story.

Smartphone Trade Surge: Nepal’s smartphone imports have hit a new high, with customs data showing 1.86M phones worth Rs 39.39B imported by mid-May—already beating the full 2024/25 value and pointing to a shift toward higher-priced devices. Croatian Water Infrastructure: On Hvar, a €77M water and wastewater upgrade for Jelsa–Vrboska and Stari Grad–Stari Grad has been completed, adding 120km of new/rebuilt networks and two treatment plants to cut losses and protect the sea. Adriatic Science Watch: Near Šibenik, researchers say a brief yellow sea “pollution” layer was driven by pine pollen, not oil or harmful blooms—part of the POLLMAR project tracking how land and air feed the marine ecosystem. Defense & Tech Links: Croatia’s drone ecosystem gets a boost as Osijek-based Orqa partners with EcoCortec® on specialized recyclable electronics packaging for global shipments. World Cup Spotlight: England’s World Cup squad headlines continue, with big names left out as Thomas Tuchel frames selection around “energy and chemistry.”

Croatia–Uzbekistan Diplomacy: Abdulaziz Kamilov, Uzbekistan’s foreign-policy adviser, met Croatian PM Andrej Plenković and ministers in Zagreb, focusing on trade, investment and joint projects in transport, energy, industry, digitalization and tourism—ending with an agreement for Croatian firms to join the Tashkent International Investment Forum. Adriatic Science: Off Šibenik, a “yellow sea” near Martinska was traced to pine pollen, not pollution, as researchers test how airborne pollen reshapes Adriatic chemistry and microbes under the POLLMAR project. Hvar Water Upgrade: A €77m water and wastewater overhaul for Stari Grad, Jelsa and Vrboska is now complete, adding 120km of new/rebuilt networks and two treatment plants to cut losses and protect the sea. Tech for Defense Logistics: Osijek’s Orqa is partnering with EcoCortec on protective drone packaging to safeguard electronics during global shipments. Tourism Pressure: Croatia’s restaurants are shrinking their massive tourist menus as costs and staffing squeeze margins.

World Cup Shock in England: Thomas Tuchel named his 26-man squad and left out big names Cole Palmer and Phil Foden, with Trent Alexander-Arnold also omitted—while Ivan Toney and Ollie Watkins got the surprise call-ups. Tuchel framed it as a “chemistry and energy” pick, not a talent list. Croatia Coast Under Pressure: A new debate is heating up over whether Croatia’s Adriatic is getting too much construction, as cranes keep multiplying from Istria to southern Dalmatia amid tourism demand and foreign buyer interest. Hospitality Adjusts: Croatian restaurants are quietly shrinking their massive tourist menus as costs rise and staffing stays tight—less choice, faster service, better margins. Tech for Defense Supply Chains: Osijek’s Orqa teamed with EcoCortec on protective packaging to help secure global drone shipments. Energy Safety Watch: Hungary’s MOL refinery explosion in Tiszaújváros killed one worker and injured nine, renewing scrutiny on industrial restart risks.

Travel Demand Surge: Jet2 says it’s seeing record numbers for May half-term, with hundreds of thousands heading to the Balearics, Canaries, Turkey, Spain, Portugal, Greece, Cyprus, Malta, Croatia and Bulgaria—after the airline ruled out flight and holiday surcharges. Roads Under Pressure: Britain braces for a hot bank-holiday rush, with the RAC expecting nearly 19 million drivers on the roads and long queues likely toward seaside routes and Dover as border checks bite. Energy & Industry: ACER warns Southeast Europe’s 2024 electricity price spikes were driven by a lack of flexible power and limited cross-border capacity, pushing regulators toward more flexibility—not just more interconnectors. Croatia Watch: Croatia’s wage growth continues (March average net €1,555; median €1,317), while EBRD backs a €70m multi-country battery storage push in the region. Regional Trade: Bruegel flags rising non-tariff barriers and border delays as Western Balkans integration into EU supply chains slows.

Inflation Watch: Eurostat says euro area annual inflation jumped to 3.0% in April (from 2.6% in March), with services and energy driving the rise—Croatia is listed at 5.4%, among the highest in the bloc. NATO Funding Pressure: Sweden’s and Netherlands’ leaders (Rutte and Kristersson) are pushing for more allies to pay up for Ukraine, calling out uneven contributions. Energy & Security Tensions in the Balkans: Bosnia’s gas plans face fresh scrutiny as anti-corruption voices warn revised procurement could sideline competition; meanwhile Greece flags a Ukrainian sea drone incident near Lefkada as a serious threat. Transport & Border Friction: Serbia, Bosnia and Montenegro transport groups warn new EU rules could slow goods and raise costs amid driver shortages. EU Nature Fight: Ten-plus countries, including Croatia, want the cormorant added to huntable species under the Birds Directive. Croatia Policy: Parliament is set to debate tighter alcohol sales rules, including local control over shop hours and stricter age checks.

Inflation Watch: Eurostat says euro area annual inflation rose to 3.0% in April (from 2.6% in March), with services, energy and food pushing prices up; Croatia sits among the higher end at 5.4% (EU: 3.2%). Croatia Economy: The European Commission also cut Croatia’s growth outlook, now forecasting 2.7% for 2026, while warning energy prices and geopolitics are weighing on momentum. Policy Pressure: Croatia’s Parliament is set to debate tighter rules on alcohol sales, including local control over shop selling hours and stricter age checks. Transport & Trade: New EU driver rules and Schengen/EES changes are worrying Balkan carriers, who warn of higher logistics costs and slower goods flow. Environment Clash: Ten EU countries want an “open season” on cormorants under the Birds Directive, arguing damage to fisheries and aquaculture. Energy Diplomacy: In Bosnia and Herzegovina, US officials highlighted the Southern Interconnection as a diversification play beyond single suppliers. Business Moves: Fortuna opened a new 120-seat global capability centre in Hyderabad, adding AI and analytics capacity.

Food Price Politics: UK supermarkets are pushing back hard on government plans to cap staple prices like bread, milk and eggs, arguing they’re already squeezed by taxes, levies and compliance costs—while officials worry Middle East-linked energy and fertiliser shocks could push food inflation higher. Digital Fraud: A new Android scam is enrolling victims in premium carrier-billed services via nearly 250 lookalike apps, targeting users by mobile operator and location, including Croatia. World Cup Security: The US says ICE and HSI will be visibly present during the 2026 FIFA World Cup as ticket sales lag and resale prices fall, aiming to crack down on counterfeit tickets and trafficking. Croatia Mobility & Tourism: Croatia’s ties with Croats abroad are scaling up—€161m allocated in 2024—with more returns and immigration steps; meanwhile, Croatia’s tourism keeps climbing, with 2025 overnight stays topping 85.6m. Energy & Markets: Energean cut 2026 guidance and dividends after a 41-day Israel shutdown, while eurozone inflation hit 3% in April, driven by energy.

Energy Shock: Energean cut its 2026 output forecast and dividends after a 41-day shutdown of its Israeli operations hit Q1 results; production restarted in April and the company says growth projects in Greece and Egypt are still on track, with first gas in Israel and Croatia targeted for 2027. Inflation Watch: Eurozone inflation was confirmed at 3.0% in April, the highest since Sept 2023, driven mainly by a 10.8% energy jump—Croatia sits among the higher-rate countries at 5.4%. Gas & Infrastructure: Slovenia and Croatia’s grid operators Plinovodi and Plinacro agreed to boost capacity on the Rogatec interconnection, tightening regional energy connectivity. Tourism & Cities: Osijek’s €13.5m Copacabana pool redevelopment is nearing completion for a mid-June opening, while Dubrovnik’s new elderly care centre is in its final phase ahead of an October opening. Policy: Croatia approved Foreigners Act changes: stricter Croatian language requirements, but more flexibility for foreign workers to switch jobs after six months.

Tourism Enforcement: Croatia is moving to rein in beach bar chaos, with tighter rules aimed at noise, overcrowding and illegal build-outs that have strained coastal communities. Marina Makeover: At the same time, marinas are evolving into year-round waterfront mini-districts—mixing hospitality, retail, events and residences, not just berths. Labour Pressure: Croatia’s foreign-worker rules are also tightening: new language requirements for permit extensions, but more flexibility to switch employers after six months—an attempt to balance shortages with control. Regional Heat: Montenegro is warning of a growing seasonal worker shortage, pushing employers toward foreign labour imports. Energy Investment: ENNA Geo is buying three geothermal exploration licences in Croatia, with completion expected in H2 2026. Business Signal: Ryanair’s profits jumped, and Croatia is highlighted as one of its fastest-growing markets—supporting the summer travel engine.

Foreign Workers Overhaul: Croatia’s Parliament has approved major changes to the Foreigners Act—foreign workers must pass a basic Croatian language and Latin alphabet exam within a year to extend permits, while also getting more flexibility to switch employers after six months and longer unemployment allowances. Geothermal Push: ENNA Geo is buying three geothermal exploration licences in Ernestinovo, Sječe and Pčelić, aiming to add to its Zagocha and Babina Greda projects, with completion expected in H2 2026. Tourism Demand Shifts: Inland-to-coast “mini-breaks” are reshaping Croatia’s summer season, helped by faster road access and more frequent short trips. Tourism Cost Debate: Ahead of peak season, municipalities are revisiting tourist taxes and seasonal levies as they weigh infrastructure pressure against keeping destinations competitive. Culture & Business Links: Croatia and Vietnam are moving to deepen economic and defence cooperation, with tourism, trade and joint projects on the agenda.