GDP growth falls to 2.2%, consumption and investments drag economy down

Croatia's economy is showing signs of cooling, with gross domestic product (GDP) growth decelerating to 2.2% in the first quarter of 2026. This marks a significant drop from the 3.9% growth recorded in the preceding period, signaling a shift towards slower economic expansion.

The slowdown is evident across key economic indicators. Personal consumption, a major driver of growth, is weakening. Investment activity is also losing momentum, and even export performance and industrial output are showing signs of reduced dynamism. The data suggests that the domestic economy is gradually entering a phase of more subdued growth.

Further illustrating this trend, state expenditure saw a minimal increase of just 0.7% on an annual basis. This represents the slowest pace of government spending growth since the second quarter of 2022. On a quarterly basis, the economy practically stagnated, highlighting the broad-based nature of the economic slowdown.

This cooling trend was observable even before the government introduced new measures aimed at combating inflation. The latest GDP figures confirm that Croatia's economic engine is gradually losing steam, with nearly all crucial components contributing to the deceleration.