Singapore has ranked third in the annual world competitiveness ranking by Swiss business school IMD, overtaken by Hong Kong, who came in at second place.
The United States retained the pole position.
The study looked at 61 countries and ranked them according to four indicators – economic performance, government efficiency, business efficiency and infrastructure.
Singapore’s labour productivity fell for the fourth straight quarter in the first three months of the year, leading to a ranking of 12th for the “productivity and efficiency” indicator.
The city-state was ranked 50th of the 61 countries for the “prices” indicator, which took into account consumer price inflation (CPI), food, petrol and rent costs, to name a few.
It was also ranked 58th for cost of living and 57th for immigration law.
Areas it did well in included several indicators of government efficiency, including government decisions, ease of doing business and adaptability of government policy, where it placed first.
“The new government policy is towards trying to protect Singaporeans, their jobs and Singapore businesses,” Professor Arturo Bris, director of the IMD World Competitiveness Center, said.
Nevertheless, Barclays economist Leong Wai Ho said the policy “reflects the push to reduce the economy’s over reliance on foreign unskilled labour”.
The rankings also included a survey of over 6,000 international executive who were quizzed on the most attractive factors of countries. Respondents said policy stability and predictability, reliable infrastructure and government competency, were Singapore’s top three attractions.
The bottom three areas included a strong research and development culture, cost competitiveness, and open and positive attitudes towards foreigners.
Singapore’s high cost of living, dropping labour productivity levels and attitudes towards foreign labour has seen Hong Kong overtake the city-state in a worldwide competitiveness index.