This report reviews key macroeconomic data and microeconomic developments for Croatia published between June 8 and July 5, 2015. The World Bank said in June it expects Croatia’s economy to expand by 0.5% this year and thus record its first growth after six straight years of decline. The growth should strengthen in the next two years, by 1.2% in 2016 and 1.5% in 2017. The IMF warned that fiscal vulnerabilities, incomplete corporate balance sheet repair, and structural weaknesses pose risks to Croatia’s economic recovery, while Moody’s Investors noted in a report that Croatia-based issuers are the most vulnerable to the euro depreciation against other currencies. The report provides details on the latest developments regarding the Ionian-Adriatic Gas Pipeline (IAP) and contains information about the planned initial public offering (IPO) of Croatia’s HAC ONC, the maintenance and tolling unit of motorway operator Hrvatske Autoceste. It also shows which EU member states decided to maintain labour market restrictions for Croatian citizens. Key Points: • Croatia's consumer prices stayed flat on the year in May following a 0.1% annual decline in the previous month. The working-day adjusted industrial output rose 4.4%, accelerating from 1.2% in April. The annual growth of the first five months of the year reached 1.3% y/y. • First quarter current account deficit widened to €1.28bn from a deficit of €625.8mn in Q4 2014. • The unemployment rate fell to 17.1% in May from 18.4% in April. This was the third consecutive month of decrease. The average net monthly wage rose 3.4% in April, slowing from a 3.9% hike in March. • January-April trade gap narrowed 4.1% y/y as exports rose at a faster pace than imports.