The gradual but sustained economic recovery after the historic collapse of GDP as a result of Covid-19 has led Spain to recover three positions in the 34th edition of the World Competitiveness Ranking produced annually by the Institute for Management Development (IMD). The country now ranks 36th out of 63 economies surveyed, down from 39th in last year’s ranking.
The recovery of the tourism sector has played a fundamental role in the rise, according to the IMD Competitiveness Center. Thus, the improvement in the general classification is the result of a better economic performance than in the past year, especially with regard to GDP growth, as well as advances in the growth of exports of commercial services, investment and employment, as pointed out by José Caballero, Senior Economist at the IMD’s Center for Global Competitiveness.
Likewise, he adds that “there are also substantial improvements, although to a lesser extent, in technological and scientific infrastructures, and in health and environmental measures. However, the effectiveness of the Administration and companies seems somewhat stagnant compared to 2021, especially in the cases of public finances and company legislation, which have actually seen a steady decline since 2020.”
According to IMD experts, the main challenges that the Spanish economy has to solve are related to the efficient management of European funds, to strengthen the productive system and configure a resilient economy; the promotion of digitization and research; improve the employability of workers by rethinking employment policies within the framework of social dialogue; the management of inflation in such a way that it does not harm competitiveness and the strengthening of the industry by rethinking distribution chains.
The inflationary crisis, according to the study, is one of the main headaches worldwide. For 50% of the executives surveyed, the main concern is prices, while 49% mention geopolitical conflicts and 48% bottlenecks in the supply chain. For its part, the prospect of a prolonged presence of Covid-19 ranks fourth.
In the top 10, Denmark, “the most advanced country in the world in the digital field, heads the ranking thanks to its good policies, the advantages that being a European country gives it, a clear orientation towards sustainability and the promotion of its agile business sector”, as stated by Arturo Bris, director of the IMD World Competitiveness Center. Switzerland is in second position, leading the factors of government efficiency and infrastructure. Singapore ranks third thanks to significant improvements in its domestic economy
Sweden falls to fourth from second and Hong Kong rises to fifth from seventh, largely due to economic performance (particularly in the home economics subcategory)
For its part, the Netherlands drops two positions falling to sixth place from fourth, Taiwan gains one place, rising from eighth to seventh, and Finland enters the top 10 for the first time since 2009, rising to eighth position from eleventh. . Norway falls from sixth to ninth place and the United States reaches the top 10 once again, despite notable declines in certain subcategories.
In Eastern Europe as a region, the average competitiveness position rises to 40th place, an increase of two points from 2021. In the case of Croatia, it sees the largest increase this year, rising from 59th to 46th place and advancing in all competitiveness factors. This may be related to the improvement in business sentiment due to the country’s upcoming entry into the euro, according to IMD specialists.
In West Asia and Africa there is also an increase in the average level of competitiveness (from 38th to 37th on average), and the same is true in South America, where the economies have experienced a slight improvement in competitiveness in the last year, advancing from the position 57 to 56 on average.
East Asia remains at the top of the sub-regional ranking. The drop of one position (from 17th to 18th) in the average competitiveness position of the economies of this region represents a reversal of the positive trend that began in 2020. In the case of New Zealand, it suffers the greatest drop in the ranking (from position 20 to 31), when descending in all the factors of competitiveness.
Western Europe also interrupts its positive competitive progression, which began in 2019, and stabilizes at 20th place on average. Some economies such as Belgium or France are gaining positions, while others such as Austria, Greece or Portugal are falling (the latter does so from position 36 to 42).
The average competitiveness results of the North American economies remain stable. However, since 2018 the levels of competitiveness in North America have fallen from an average of 21st place in the general ranking to an average of 26th place in 2022.
South Asia and the Pacific also continue their decline from the last three years, reaching 31st place on average in 2022. The economies of the former CIS (Commonwealth of Independent States) and Central Asia experience a decline in overall competitiveness reaching rank 46 on average.