This report reviews key macroeconomic data and microeconomic developments for Croatia published between February 6 and March 4, 2016. The Croatian finance minister said he he expects the country’s economy to expand by around 2% this year, but warned about the negative risks stemming from the external environment, such as the slowdown in the Chinese and American economies, possible increase of interest rates in the United States and low oil prices. Croatia’s economy expanded by a real 1.9% y/y in the fourth quarter of 2015, registering the fifth consecutive quarter of growth, and by 1.6% y/y in 2015 as a whole, following a 0.4% y/y contraction in 2014, the statistics office confirmed at the beginning of March. However, an IMF mission, which visited the country in February, stressed the Adriatic country needs to quickly implement structural reforms to sustain growth. The report also gives details about new investments in tourism, a key sector of the economy, and the government’s plans to build a new coal-fired unit at the existing Plomin thermal power plant. It also provides details about the performance of the Croatian banking sector following the government’s decision to adopt legislation on the conversion of loans denominated in Swiss francs into euros, with the costs being borne by the banks. Key Points: • Croatia's consumer prices fell 0.8% y/y in January, slightly narrowing from the 0.6% decline in the previous month. Croatia's industrial sales inched up 0.3% y/y in December, cooling from a 15.8% annual hike in the previous month. • The unemployment increased to 18.5% in January from 17.9% in the previous month. The average net monthly wage rose 1.6% in December, accelerating from a 4.9% hike in November. • Last year’s trade gap widened 1.3% y/y as exports rose at a faster pace than imports.