Germany slips in world competitiveness rankings

The US edged past both Germany and Finland in the annually published rankings of competitiveness, although European countries still made up the majority of the top ten.

The World Economic Forum (WEF), organizer of the annual Davos meeting of the globe's political and business elite, said that Switzerland - where the forum is based - remained the most competitive economy on the planet.

In second place was Singapore, which also held onto its ranking from last year.

"Both countries have transparent institutions, efficient markets and a capacity to innovate," said report co-author Benat Bilbao-Osorio.

The US, which held the top spot until the global financial crisis seven years ago, showed signs of recovery as it rose from fifth place to third, overtaking both Finland (fourth) and Germany (fifth).

The report said Germany needed to improve access to jobs for foreigners and for women, and added that the introduction of a minimum wage could make its labor market less flexible.

While there were signs of improvement from southern European countries such as Spain (remaining in 35th place), Portugal (rising from 51st to 36th) and Greece (rising from 91st to 81st), the report noted that France and Italy (both unchanged at 23rd and 49th respectively) still lagged behind.

'Wider effects of sanctions pose threat'

There was also a note of caution about the impact of the Ukraine crisis, and sanctions imposed by and against Russia as a result of it. "Possible further sanctions against Russia would, because of the size and significance of the Russian economy, not only have an effect on Russian competitiveness, but also on that of its economic partners," said Bilbao-Osorio.

With some governments yet to make reforms that would allow more growth, the forum's founder claimed the global economy remains at risk of sliding back into difficulties.

"The strained global geopolitical situation, the rise of income inequality, and the potential tightening of the financial conditions could put the still tentative recovery at risk and call for structural reforms to ensure more sustainable and inclusive growth," said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.

In a survey of emerging markets, the WEF said they continued to face difficulties in improving competitiveness. Saudi Arabia, Turkey and South Africa fell, with Mexico sliding six places from 55th to 61st.

India dropped 11 places on the list, sliding from 60th to 71st, and Nigeria slipped from 127th from 120th.

Going against the trend for emerging markets was China, which gained one place, moving to 28th. Neighboring Japan made the biggest leap in the top 10, from ninth to sixth.

rc/jm (AFP, dpa)