New Zealand’s world competitive ranking slipped five places to 20th, while Singapore, Hong Kong and the US took the top three places respectively.
The latest report from IMD ranked Venezuela as the least competitive economy in the world out of 58 countries polled. New Zealand’s closest neighbour Australia ranked as the world’s 5th most competitive economy, up two notches from last year, according to the IMD World Competitiveness Yearbook 2010.
IMD said on its website that the three most competitive economies in the world would be better defined as the “leading trio”.
It said Australia (5), Taiwan (8) and Malaysia (10) benefited from strong demand in Asia. Switzerland (4) maintained an excellent position characterised by strong economic fundamentals (very low deficit, debt, inflation and unemployment) and a well-defended position on export markets. Sweden (6) and Norway (9) shined for the Nordic model, although Denmark (13) surprisingly lost ground, in particular due to the pessimistic mood expressed in the survey.
Germany (16) led the larger “traditional” economies such as the UK (22), France (24), Japan (27) and Italy (40). Despite a significant budget deficit and growing debt, Germany’s performance was driven by strong trade (second largest exporter of manufactured goods), excellent infrastructure, and a sound financial reputation.
It was also to be expected that China (18) would lead the other developing nations, followed by India (31), Brazil (38) and Russia (51). And of course the credit-worthiness storm that affects Southern Europe acts as a drag on the performance of Spain (36), Portugal (37) and Greece (46).
BusinessNZ chief Executive Phil O’Reilly said the survey highlights the dynamic nature of global competitiveness.
“Becoming competitive is not just a matter of hitting a growth target. New Zealand must keep pace with an accelerating target as other nations create economic success. A better export performance, based on ongoing improvements in innovation and productivity are needed.”
O’Reilly said the widening of the gap between Australia and New Zealand underscored the seriousness of the government’s Budget measures to be announced.
