U.S.A LOOSES COMPETITIVENESS SURVEY

[Anonymous]

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.

[Author]

September 27, 2006 at 10:33 AM