US takes lead in performance table

The United States has reclaimed the title of the world's most competitive economy, a report from the World Economic Forum (WEF) has said.

The Global Competitiveness Report praised the US economy's "stellar performance in technology-related factors" and said the country's business environment fostered an entrepreneurial spirit.

The key question...is: once the global economy recovers, which countries are best placed to return to a sustained growth path?

Peter Cornelius, WEF

The US was back in the top spot after ceding the position to Finland last year.

The report measures the comparative strengths and weaknesses of 80 national economies and, according to the WEF, is used as a benchmark tool for policy-makers in the individual countries.

"The key question related to competitiveness our report tries to answer is: once the global economy recovers, which countries are best placed to return to a sustained growth path?," said chief economist Peter Cornelius.

Leading the pack

While the US came out on top for competitiveness, Mr Cornelius warned that this "should not lead to complacency".

The country's recent run of corporate scandals has prompted calls for greater vigilance over company affairs.

Growth Competitiveness Top 5

United States

Finland

Taiwan

Singapore

Sweden

"The country has to resolve outstanding reform issues, especially the need to improve its governance system," said Mr Cornelius.

Ongoing global concerns, including the threat of a war with Iraq and the bursting of the IT-asset bubble have also created volatile stock markets the world over.

But the WEF sounded an optimistic note, saying the world economy had proved relatively robust so far.

Competitive streak

The report, which started in 1979, bases its growth competitiveness index on technology, public institutions and the macroeconomic environment.

Following the US, was last year's leader Finland in second place.

The country's fall to second position was blamed on a slip in its information technology but the report said it was "still in a good sound position".

More worrying was Germany, in 14th position against last year's 17th.

"There seems to be no political will to do anything, which is quite unsettling for the future of the German economy," said the report.

Growth prospects

A separate index, the "microeconomic competitiveness index", assesses a country's productive potential.

While a number of countries have improved their prospects in this area, Turkey and Argentina have floundered.

The crisis-hit countries experienced some of the biggest falls in the league and there are fears that there could be worse news ahead.

Growth Competitiveness Bottom 5

Honduras

Ukraine

Bolivia

Zimbabwe

Haiti

"Future growth prospects of both countries look particularly concerning," the report said.

Recovery?

Following the turbulent economic conditions across the globe, WEF founder and president Klaus Schwab said it was now "more important than ever to assess the growth prospects of countries".

"For the recovery to be strengthened and sustained, obstacles to growth must be identified and overcome," added Mr Schwab.

He said the WEF report could be used by policy-makers to pit themselves against other countries "as they seek to improve the conditions of growth and competitiveness".

European see-saw

There was a mixed picture on competitiveness within Europe, as Sweden and Switzerland improved on last year's performance to claim fourth and fifth positions.

Switzerland's leap in ranking on the growth competitiveness index, from 15th, was the biggest experienced in the report.

However, the reverse picture was seen in France, which fell from 20th to 30th position, and Italy, which fell from 26th to 39th.