Singapore Tops US as World's Most Competitive Economy
Singapore rises to the top — according to the World Economic Forum’s annual analysis, it has knocked America down to second place on the Global Competitiveness Index.
The WEF report was published Wednesday, October 9. The index examines factors such as infrastructure, macroeconomic stability, innovation capability, and the labor market to determine a country’s economic competitive landscape.
This year, Singapore scored top marks for its health, labor, infrastructure, and financial system, earning an overall victory over the US. America “remains an innovation powerhouse,” according to the report.
The US China trade war had a big impact on the performance of countries such as Singapore and Vietnam. These two Asian economies “appear to be benefiting from global trade tensions through trade diversion.” In Vietnam’s case, the country jumped 10 spots since last year, landing at 67th place out of 137 countries.
American imports from Vietnam increased by 36% in the period between January and May of this year, as America has been shifting its companies and manufacturing forces from China to Vietnam and other Southeast Asian countries. This was an attempt to avoid the trade war’s mounting tariffs.
While Singapore benefits from the trade war in some ways, it’s also harmed by it — China is its biggest trading partner, and Singapore relies heavily on exports to China.
Despite climbing the ranks, Singapore’s government is not optimistic about the future. In August, the government slashed the forecast for GDP growth after a big drop in economic activity in the second quarter of 2019. If analysts are correct, this will be Singapore’s weakest annual growth since the global financial crisis of 2009.
What does the rest of the report say?
Here is a list of the top 10 countries according to the Global Competitiveness Index:
- United States
- Hong Kong
- United Kingdom
Hong Kong jumped four spots since last year’s report. Despite the current crisis, it seems the economy remained largely unaffected. All around the world, political tensions caused by the trade war are “fueling uncertainty,” the WEF says.
"This holds back investment and increases the risk of supply shocks: disruptions to global supply chains, sudden price spikes, or interruptions in the availability of key resources," the report said.
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