and each monitors the number of visitors with a maximum of 11,275 to the UNESCO World Heritage Site of the Old Town. Earlier this year, Croatia introduced new re-


strictions to help curb illegal rentals. From June 2026 each holiday rental in Croatia must have an official registration number to ensure taxes are paid and there are accountability and safety measures in place. Registration is free of charge but enables them


to advertise on platforms such as Airbnb or Book- ing. Without a code they cannot advertise. In the summer of 2025, there were just over 4,550 listings in Dubrovnik from Airbnb alone. According to a vacation rental market data


source Airbtics, a two-bed apartment in Dubrovnik can make up to €50,000 a year in holiday ren- tals.


Te government is also trying to curb excessive


construction in areas under housing pressure whilst at the same time supporting access to affordable housing for the younger generation.


ECONOMY


Although tourism remains Croatia’s key economic resource, economists have warned that this alone cannot sustain rapid expansion in the country indefinitely. A changing dynamic in Europe with consumer behaviour and geopolitical instability could affect future tourism demand, making di- versification important. Over the last five years, the Croatian economy


has been growing significantly. Te Q1 2026 GDP real growth rate compared to the same period last year was 2.2 per cent, slowing from an upwardly revised 3.9 per cent in the previous period. Te country relies heavily on foreign workers, particularly in the construction industry. Workers principally from Nepal, the Philippines and India make up the shortfall in labour and there is a booming construction sector – thanks to EU-funded projects - from hotels to housing developments to infrastructure. However, there is a question if projects will continue once the


current funding expires. Inflation is a key issue. Although moderate at the moment with a rate of 5.2 per cent in mid-2026, food, housing, and service costs are high. Te government launched several measures to cushion the blow with fuel tax cuts and energy subsidies. Higher oil and fuel prices are pushing up production and transportation costs, and Croatia has always been highly de- pendent on imported goods. Employment levels are relatively strong and


public finances are healthier than they were 10 years ago. Te unemployment rate is around 3.7 per cent. A record number of Croatians who were living abroad are now returning home due to im- proved living standards and a more stable economy. Te immigration department recorded around 13,000 returnees in 2025, with most arriving from Germany, Austria and Ireland. To accelerate repatriation, the government in-


troduced a five-year income tax exemption for returning citizens who had lived abroad for at least two years, alongside housing support schemes.


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