Croatia's business optimism falls, industry and ICT hit hardest

The HLIPO (Leader-Hendalov) index shows Croatia’s business optimism has weakened for the sixth consecutive quarter, with the sharpest declines recorded in the industry and ICT sectors. Tourism remains the only sector with a notable boost, posting the highest optimism level in five years.

Economists from the Croatian Employers' Association link the trend to a slowdown in real GDP growth, now estimated at 2.2% in the first quarter of 2026, and project overall economic growth of around 2.5% for the year. Structural constraints persist: retail sales grew just 0.5% in May, employment and consumer credit are stagnant, and households are increasingly saving. Energy costs, which are about 18% higher for large consumers than the EU average, pressure industrial margins.

The analysis also notes that foreign demand for ICT services is becoming more selective, while generative AI begins to automate routine tasks, reshaping the sector’s outlook. Domestic ICT firms face high labor taxes and modest R&D investment—about 1.4% of GDP, well below the EU average of 2.2%. These factors suggest that future economic performance will rely increasingly on high‑value‑added activities and innovation.