US loses top competitiveness spot

Financial market weakness contributed to the US losing its top spot

Switzerland has overtaken the United States as the world's most competitive economy, according to a report from the World Economic Forum.

The US was knocked off the top spot due to its weakening financial markets.

The UK slid for the second year in a row, coming in 13th place, again due to weak financial markets.

European economies dominate the top spots, with Sweden, Denmark, Finland, Germany and the Netherlands also appearing in the top 10.

France was ranked 16th, Spain 33rd and Italy 48th.

'Strong footing'

The Forum's Global Competitiveness Report 2009-2010 said the reason Switzerland overtook the US was its relative economic stability.

MOST COMPETITIVE ECONOMIES Switzerland United States Singapore Sweden Denmark Finland Germany Japan Canada The Netherlands Source: World Economic Forum

It also praised the Swiss economy's "excellent capacity for innovation and a very sophisticated business culture".

Despite highlighting financial market weakness and macroeconomic instability in the US, the report said the US economy was "endowed with many structural features that make it extremely productive and that place it on a strong footing to ride out business cycle shifts and economic shocks".

The report also showed that China is leading the way among the large developing countries, appearing at 29 on the list of the world's most competitive economies.

India came in at 49, Brazil at 56 and Russia at 63.

'Growing uncertainty'

The report also highlighted the scope of the global downturn.

"The strong interdependence among the world's economies makes this a truly global economic crisis in every sense," said Klaus Schwab, executive chairman of the forum.

"Policymakers are presently struggling with ways of managing these new economic challenges, while preparing their economies to perform well in a future economic landscape characterised by growing uncertainty," he added.

The report also stressed the importance of competitiveness in enabling economies to deal with downturns.

The report calculates the rankings using publicly available data and a survey of 13,000 business leaders across 133 economies.