Key facts
- Singapore is now ranked the most economically competitive nation globally by the IMD business school.
- Switzerland, previously first, has fallen to third place in the annual ranking.
- Hong Kong secured the second position, followed by Taiwan in fourth and the UAE in fifth.
- Factors contributing to Switzerland's decline include U.S. tariffs and reduced foreign direct investment.
- Switzerland's governmental structure and rising global protectionism were also cited as influences.
Singapore has ascended to the top position in the IMD World Competitiveness Ranking, displacing Switzerland, which now ranks third. The annual assessment by the IMD business school evaluates economic performance, business and government efficiency, and infrastructure across 70 nations.
Hong Kong secured the second spot, while Taiwan and the United Arab Emirates followed in fourth and fifth places, respectively. The United States was ranked tenth, with Venezuela at the bottom of the list.
According to IMD professor Arturo Bris, Switzerland's slip in the rankings was primarily due to a weaker economic performance, influenced by high U.S. tariffs imposed by the Trump administration and a decrease in foreign direct investment last year. The study also highlighted that Switzerland's consensus-based governmental approach can lead to slower responses during crises, and the country was negatively impacted by rising protectionism and the weakening of globalization.
Bris noted that smaller countries not aligned with larger trade blocs are particularly vulnerable in the current global climate where the rule of law has reportedly deteriorated. A separate study indicated that Switzerland had already been surpassed by Hong Kong as a preferred destination for wealthy foreign investors.
However, Ivo Germann, representing the Swiss economy ministry, asserted that Switzerland maintains a high level of competitiveness, particularly excelling in government efficiency and infrastructure. He added that Switzerland is actively countering protectionism by pursuing more free trade agreements, referencing recent pacts with India and the South American trade bloc Mercosur.