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U.S. No Longer Tops Competitiveness Survey
WASHINGTON (Sept. 06) – The U.S. economy, burdened by fiscal deficits and widening global imbalances, lost its top ranking in a global competitiveness survey released Tuesday by the World Economic Forum.
The U.S. ranking slipped to sixth, down from the top spot last year, with Switzerland the new number one.The U.S.’s overall competitiveness is “threatened by large macroeconomic imbalances, particularly rising levels of public indebtedness associated with repeated fiscal deficits,” the survey found.The U.S. ranking remains “vulnerable to a possible disorderly adjustment of such imbalances, including historically high trade deficits,” the survey added.The competitiveness study rates countries worldwide based on a wide range of criteria, including macroeconomic policies, market regulations and technological development, which in turn affect an economies long-term growth prospects, according to the WEF.China also saw its ranking slip, from 48 to 54, as a number of “structural concerns,” including the state-controlled Chinese banking sector, continue to drag on its ranking.Levels of financial intermediation are low in China, and “the state has had to intervene from time to time to mitigate the adverse effects of a large, non- performing loan portfolio,” the survey said.A large budget deficit dragged down Brazil’s ranking, which slid from 57 to 66th. “High levels of government debt and a wide interest rate spread given an indication of the heavy intermediation costs in the Brazilian banking sector, which negatively affect private sector investment and contribute to lower economic growth,” the report said.At the head of the class, Switzerland assumed the top spot for the first time on the merits of efficient markets and “sound institutional environment.”In keeping with recent trends in the survey, the Nordic countries – Finland, Sweden and Denmark – filled out the second through fourth positions, based on strong infrastructure and government policies.
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