Singapore regains title of world's most competitive economy

The city-state rose past Denmark and Switzerland in rankings and clinched the top spot thanks to better performances in economic performance, government efficiency, business efficiency and infrastructure, according to IMD’s World Competitiveness Ranking report.

Among its rivals, Singapore stood out for business efficiency, ranking first on the index for labor market and attitudes and values, according to The Edge Singapore.

Additionally, it showed strong management practices and technological infrastructure.

Nonetheless, the city-state faced challenges in price competitiveness, health and environmental factors, and societal framework.

The high costs of living there, ranked 62nd out of 67, is especially concerning, Associate Professor Jamus Lim from Essec Business School pointed out.

"This becomes the primary challenge for policymakers, not only because high prices and costs weigh on Singapore’s competitiveness, but also because of its implications on people’s confidence in the economy," he told The Straits Times.

He added: "Wage growth has barely kept pace with overall inflation, and if anything, I would like to see real wages continue to rise this year and next, to offset the loss in purchasing power of the population. But productivity needs to pick up the slack, hopefully from gains that emerge from a wider roll-out of artificial intelligence into the economy."

To compile the ranking list, IMD assessed 6,612 survey answers from C-suite executives and mid-level managers and 164 pieces of statistical data from 67 global economies between March and May 2024.

Switzerland ascended to second place from third in 2023, driven by enhanced economic performance and business efficiency, alongside its strengths in government efficiency and infrastructure.

Meanwhile, Denmark, previously the top-ranked country, slipped to third place this year due to a drop in economic performance.