This is the second regular report which is based on figures for 2003 and 2004 and data from the Global Competitiveness Report, which was presented last October and which covered the 2004-2005 period.
According to the Global Competitiveness Index, Croatia finished as 79th out of 104 countries on the list. Bulgaria and Romania have better performed on these rankings.
According to the Growth Competitiveness Index, Croatia fell from the 53rd place in 2003 to the 61st place, and according to the Business Competitiveness Index it was ranked as 62nd in 2003 and as 67th in 2004, the report presented by the World Economic Forum last October, said.
The report which the National Council adopts by consensus reads Croatia has fallen by two to 21 places since 2002 on various relevant rankings, with the poorest performance in productivity of public spending.
The reason for nonproductivity of public spending is ascribed to a large share of public subsidies, that are six times higher than in the 15-member EU, Marinac said adding that state subsidies should not be vertical but horizontal.
Some other factors that unfavourably affected Croatia's competitiveness are inefficient public administration and judiciary, corruption, and slow changes in the business environment.
Marinac warned about the deceleration in the growth of the Gross Domestic Product, and underlined the fact that Croatia was in a zone of moderate indebtedness as regards the ratio of the external debt and the export, but it was in a zone of high indebtedness as regards the share of the external debt in GDP.
Marinac also advocates re-industrialisation of the country in light of the fact that what Croatia is producing now is not sufficiently attractive to consumers in the European bloc.
Croatian Deputy Prime Minister Damir Polancec, who is Council member, said the figures from the report cannot be satisfactory, but there was no great reasons for pessimism.
He expressed hope that the launched reform in the judiciary, the education according to the Bologna process and the continuous adjustment of the state administration to the EU standards would contribute to a better report next time.
Polancec also announced reforms in the health sector and pension system, the restructuring of the state-run Croatian Railways (HZ) company as well as in companies in the aluminium and steel production for this purpose.