India has dropped three spots to the 40th position on the latest Global Competitiveness Index released by the International Institute for Management Development (IMD), a Moneycontrol report said. While this represents a decline from last year, it is an improvement from the 43rd rank secured in 2019-2021.
The IMD’s World Competitiveness Centre (WCC) report highlighted India’s progress in government efficiency but pointed out lagging performance in business efficiency, infrastructure, and economic performance. Key factors contributing to India’s score were exchange rate stability, compensation levels, and advancements in pollution control.
The report cited by Moneycontrol also identified several challenges India is expected to face in 2023. These include sustaining high GDP growth, managing financial market volatility, controlling inflation and fiscal deficit, accelerating digital transformation, and mobilizing resources for infrastructure development.
Global Competitiveness Snapshot
Out of the 64 economies ranked in the annual report, Denmark, Ireland, and Switzerland claimed the top three spots. The Netherlands, Taiwan, Hong Kong, Sweden, the US, and the UAE rounded out the top 10.
Notably, Ireland experienced a significant leap in this year’s ranking, jumping from the 11th position to second place. This can be attributed to its strong performance in the economic domain, where it secured the top position, climbing from seventh place. Factors such as a skilled workforce, high educational attainment, policy stability, predictability, a competitive tax regime, and a business-friendly environment contributed to Ireland’s advancement.
On the other hand, Singapore dropped to the fourth position from third place. It ranked fifth in 2021 after securing the top position in 2019 and 2020. The report attributed the drop to specific aspects of government efficiency, such as competition legislation and adaptability of government policy. Nonetheless, Singapore demonstrated strong performance in other areas, securing second place in employment, fourth place in international investment, and sixth place in productivity and efficiency.
Denmark maintained its top position by consistently performing well across all measured competitiveness factors, excelling in business efficiency and infrastructure while displaying improved results in government efficiency. Switzerland secured the third spot, demonstrating strong performance across all competitiveness factors, particularly in government efficiency and infrastructure. However, it experienced a slight decline in business efficiency and improved its economic performance.
The report highlighted that economies that delayed their reopening after the Covid-19 pandemic were starting to witness improvements in their competitiveness. Thus, Thailand, Indonesia, and Malaysia progressed in ranking, while early-opening economies like Sweden and Finland experienced setbacks.
The European region as a whole performed well in the ranking, with five economies securing positions in the top 10. Moneycontrol quoted Professor Arturo Bris, Director of the WCC, as saying that the ranking provides valuable insights for evaluating different business environments, supporting international investment decisions, and assessing the quality of life in each country.
The report also observed that the most competitive countries at the top of the list have unique approaches to achieving competitiveness, often leveraging market access and trading partnerships. Additionally, highly competitive economies tend to have robust and efficient institutions. Moneycontrol quoted Christos Cabolis, WCC’s Chief Economist, as saying that resilient economies like Ireland, Iceland, Bahrain, the UAE, Saudi Arabia, Qatar, and Singapore have excelled in building resilience and adapting policies based on current economic conditions.
The IMD World Competitiveness Yearbook (WCY), first published in 1989, is a comprehensive annual report that serves as a global reference point for a country’s competitiveness. The ranking is based on an extensive study using economic literature, global, national, and regional sources, as well as inputs from the business community, government organisations, and academics.
(With Inputs from Agencies)
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