Slovenia has fallen three places to 49th out of 70 countries in the latest IMD World Competitiveness Ranking, with the steepest decline recorded in government efficiency, a seven place drop to 55th that reflects growing institutional dysfunction under the new conservative administration. The Swiss based institute’s annual assessment, which evaluates 262 indicators across economic performance, government efficiency, business efficiency, and infrastructure, paints a sobering picture for a country that once prided itself on outperforming regional peers. The survey, conducted among senior managers ahead of the March 2026 general election, captures sentiment from the final months of Robert Golob’s liberal government and the early days of Janez Janša’s return to power.
The government efficiency collapse is the report’s most alarming finding. Slovenia plummeted in nearly every sub category, business legislation fell ten spots to 61st, employment of foreign nationals dropped to 55th, and government protectionism slid to 50th. Public finance deteriorated eight places to 53rd amid rising deficits, while the institutional framework lost three positions to 48th. Labor legislation remains a chronic weakness at 67th, with managers citing last year’s mandatory Christmas bonus and minimum wage increases as factors eroding flexibility. The only bright spot in government performance was tax policy, which held steady. Sonja Uršič of the Institute for Economic Research, which conducted the Slovenian survey, emphasized that “strong institutions and the ability to manage uncertainty and shocks are crucial for economic success,” noting that competitive advantage increasingly depends on “institutional credibility, adaptability, and resilience.”
Economic performance also weakened, with Slovenia losing five rungs to 42nd overall. The domestic economy sub category collapsed to 56th as growth slowed and resilience to economic cycles diminished. On the positive side, international trade improved two spots to 8th, though international investment stagnated at 58th. Foreign direct investment levels remain “significantly lower than in neighboring countries or the Visegrad group,” Uršič noted, and companies have dramatically downgraded their assessment of relocation risks, with Slovenia falling 30 places to 65th in that indicator. Housing and fuel price hikes pushed the prices sub category down five spots to 22nd. Business efficiency declined one place to 56th, with productivity and efficiency dropping nine spots, a gap that Mateja Drnovšek of the Ljubljana School of Economics and Business said indicates Slovenia “has fallen behind the leading economies.” Managerial perceptions of skilled workforce availability deteriorated to 55th, while supervisory board effectiveness languished at 69th and corporate attitudes and values at 65th.
Infrastructure provided the sole area of improvement, rising one spot to 38th. Basic infrastructure gained seven places to 48th, while health and environment held steady at 30th. However, technological infrastructure fell to 50th, scientific infrastructure to 35th, and education to 31st. The Chamber of Commerce and Industry responded with a stark warning that Slovenia “needs a development response, a stable and predictable business environment and systemic measures,” urging the new government to reduce the tax burden on labor and companies, ensure competitive energy prices, accelerate foreign worker employment, and cut bureaucratic procedures. The report’s timing is particularly awkward for Prime Minister Janša, who campaigned on tax cuts and anti corruption but now inherits a competitiveness crisis rooted in institutional decay. Without decisive action to restore government efficiency, boost productivity, and attract investment, Slovenia risks sliding further from the European mainstream it once sought to lead.
