The ranking is topped by Switzerland.
The other Top Ten countries are Sweden, Singapore, the United States, Germany, Japan, Finland, the Netherlands, Denmark and Canada. Chad is at the bottom of the list.
Many countries in transition and some of Croatia's neighbours fared better than Croatia.
For instance, Slovenia is placed 45th and Montenegro 49th. Macedonia came close to Croatia, being 79th.
Croatia's increasingly bad results are not a consequence of the recession but of its internal problems, Council chairman Ivica Mudrinic said today.
This is evidenced by assessments of some of the pillars of the national competitiveness which show that Croatia's advantages are technological development, infrastructure, health care and primary education, as well as macroeconomic stability.
The main disadvantages are the poor efficiency of the labour and commodity markets, and of state institutions, the lack of business sophistication, and the insufficiently developed financial market.
The lowest marks were given to cooperation between employers and workers, the burden of government policies, agricultural policy costs and taxation volume and effects.
Mudrinic pointed out the capital price in Croatia as being completely discouraging for entrepreneurs.
If the government borrows capital at the interest rate of 6 to 7 percent, it is clear that the business sector cannot expect a lower capital price. If government bonds have an interest rate of 6.5 percent, it is clear that it pays more for business people to invest into government bonds than into launching a business, he said.
Prime Minister Jadranka Kosor's economic advisor Zeljko Peric said that Croatia would most probably further move down the ranking next year.
Croatia needs somebody who will mobilise changes, and that could be the National Competitiveness Council thanks to its political neutrality, Peric said, adding that while other countries were recovering from the crisis, Croatia was still scraping rock bottom.