Published: Thu, October 10, 2019
Markets | By Otis Pena

Singapore overtakes U.S. as world’s most competitive economy

Singapore overtakes U.S. as world’s most competitive economy

Singapore took the top spot, as the country benefitted from trade reroutes as a result of the trade war.

Among the G20 countries, India has one of the least competitive economies, only ahead of Brazil and Argentina who are at the 71st and 83rd spots respectively. Last year India was ranked 58th in the annual index.

The index analyses the landscape of 141 economies based on over 100 indicators in a dozen categories, including headings like health, financial system, market size, business dynamism and capacity to innovate.

By country, Singapore ranked top in the WEF report, followed by the US, Hong Kong, the Netherlands, Switzerland, Japan and Germany.

Another important development highlighted by the index is Singapore replacing the USA as the world's most competitive economy.

United States imports from Vietnam rose by 36% in the first five months of this year, as companies have been shifting manufacturing from China to Vietnam and other Southeast Asian countries to avoid steep tariffs.

Launched in 1979, the report provides an annual assessment of the drivers of productivity and long-term economic growth.

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In the overall GCI, however, India is trailed by its neighbors, with Sri Lanka at 84, Bangladesh at 105, Nepal at 108 and Pakistan at 110.

She noted the lack of "hard data" on the impact of U.S. tariffs imposed on several of its main economic partners, as the set of products impacted remains limited compared to overall trade.

In areas where Qatar achieved global top ranks, the country was placed first in the Arab world and among the top 10 countries globally in many indicators.

The Finance Ministry also plans to form a private-public joint committee to devise ways to improve the country's global competitiveness, it added. At the same time, health conditions remain poor, as reflected in low healthy life expectancy (59.4 years, 109th), which is one of the shortest outside Africa and significantly below the South Asian average. The country's macroeconomic stability rank also slid 12 notches to 55th from 43rd, with the report noting that the inflation rate of the country is just easing this year after it was at a nine-year high last year.

"Product market efficiency (101st) is undermined by a lack of trade openness (131st) and the labour market is characterised by a lack of worker rights' protections, insufficiently developed active labour market policies, and critically low participation of women", it said.

The forum focused its report on continued low productivity growth a decade after the financial crisis, calling this the $10 trillion question - the amount injected by the world's four major central banks through 2017.

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