The business cycle

Slovenia has dropped to the lowest position of 49th place on the International Institute for Management Development's (IMD) global competitiveness ranking among 70 economies, signaling a decline in the country’s business environment. The drop comes amid growing concerns over administrative barriers, high energy costs, slow digitalization, and a shortage of skilled labor, all of which are hindering productivity growth and investment. According to the Gospodarski Krog, a coalition of economic organizations in Slovenia, these challenges threaten the quality of jobs, public services, and social security, which depend heavily on a successful economy. The Gospodarski Krog has urged the government, social partners, and the broader public to prepare for a comprehensive development agreement aimed at improving Slovenia’s business climate. This initiative would focus on creating benefits for all citizens, businesses, and the state. A key issue highlighted is the need for the Constitutional Court to quickly decide on the legality of a referendum regarding the Law on Intervention Measures for the Development of Slovenia (ZIURS). Such a decision would allow further discussion and preparation of measures to enhance Slovenia’s business environment and accelerate national development. A competitive business environment is crucial for the nation’s prosperity. Successful companies create jobs, invest in development, produce goods and services both domestically and internationally, and contribute significantly to public services such as healthcare, long-term care, education, infrastructure, safety, pensions, and other systems. Therefore, competitiveness is not merely an economic concern but a question of future development and well-being for all citizens. Today, companies face multiple pressures simultaneously. Labor costs are rising faster than productivity, investments are under pressure, export markets remain uncertain, energy continues to be a major expense, and procedures for implementing projects are often lengthy and complex. In addition, the conditions for doing business in Slovenia are constantly changing. In this environment, companies find it difficult to make developmental decisions, expand production, and create higher-value jobs. For the competitiveness of the economy, a competitive and efficient banking environment is also essential. Banks are central sources of financing for companies and thus directly influence the costs of operations and development of the economy through their operating conditions. If the national regulatory framework does not provide equal competitive conditions compared to other European Union countries, it increases the cost of doing business and financing banks, thereby reducing their ability to offer favorable financing options to businesses. Consequently, higher banking operation costs are passed on to more expensive financing for investments, development, and internationalization of the economy. The Gospodarski Krog emphasizes that companies are ready to invest, hire, and adapt to new circumstances, but they require a stable, predictable, and development-oriented business environment. If conditions do not improve, the risk of fewer investments and the relocation of activities to more competitive environments increases. The adoption of the Intervention Law for the Development of Slovenia has shown that movement toward both administrative and tax relief is possible. The Gospodarski Krog supports measures that reduce burdens on businesses and citizens while opening space for development-oriented changes. Among the more significant solutions in the law are the development capacity on social contributions, reduced VAT on certain basic food items, temporary reduction of VAT on energy products, changes in the handling of standardized and micro-enterprises, and the possibility of continuing work while receiving full pension benefits. The law opens the door to changes, but for a real developmental breakthrough in Slovenia, a second phase must follow with a comprehensive and systematic shaping of measures with clear goals.