Denmark, the most competitive nation in economic terms according to IMD ranking

Denmark, the most competitive nation in economic terms according to IMD ranking

The National Institute for the Development of Management, in its most recent publication, highlighted Ireland as the nation with the best domestic performance of its economy for the first time, surpassing countries such as the United States and Singapore in a ranking that studies 64 countries in the world and in which Colombia is one of the countries analyzed. The ranking It also measures infrastructure quality, government efficiency, and business efficiency.

Ireland is the only country of those that make up the United Kingdom that appears in the top 10 of the ranking. However, in the general ranking, it occupies second position behind Denmark since the classification weights the performance of the countries in the four previously mentioned dimensions.

In the general classification, Europe is at the forefront of the ranking since, of the first 10 countries, 5 are European. After them are the Asians (which highlights the fact that there are the autonomous territories of Taiwan and Hong Kong and not China), Singapore and the United Arab Emirates and in America only the United States appears in ninth position.

In terms of economic performance, which measures the domestic performance of the economy, the number and type of international treaties, foreign investment, the general level of employment and the competitiveness of its prices, Ireland is the nation that leads (84.4 points) thanks to a GDP growth of 12% in 2022 and an unemployment rate of 4.2%. However, the challenges it will have to assume focus on an increase in the interest rates of its central bank (which are in line with those of the European Central Bank) and the high costs of energy, partly due to the energy crisis that surrounds Europe due to the war between Ukraine and Russia.

The United States, second in the ranking of economic performance (80.4), is the most prominent nation in international investment. Although inflation did not close last year at the figure that the Federal Reserve expected, Fears of an economic recession have been dissipating. With the presidential elections in November, the fate of commercial and diplomatic relations with China will be determined.

Precisely China, the world’s second superpower, Its position in the ranking has been affected by the crisis in the real estate sector that it is going through; Evergrande, a Chinese construction company, entered into a liquidation process. Likewise, the challenges to be assumed focus on regaining confidence in foreign investment and stabilizing trade relations with Taiwan and the United States.

With respect to government efficiency, which measures how optimal (not necessarily lax) regulations are in stimulating investment and economic growth, Switzerland is the country with the best rating (93.5) compared to Hong Kong and Ireland, 93.4 and 86.7 respectively. The Swiss have one of the highest costs of living which is reflected in the GDP per capita of its citizens (US$84,427 in 2022) and general GDP of US$807.7 billion for the same year. However, its challenges focus on moving away from protectionism and keeping its markets open in order to align its efforts with eurozone inflation, which closed January at 2.8%.

Hong Kong, an autonomous territory of China, stands out in the ranking thanks to the free movement of capital, talent and information, its tax policy and legislation that facilitates the execution of business. But its main challenge in recent years is and will continue in the coming years in its attempts to become independent from China.

Luxembourg closes the top 10 of the most governmentally efficient countries, largely thanks to the low tax rates that are taken advantage of by multinational companies to establish its tax headquarters there and enjoy lower taxes.

One of the key factors in determining how competitive an economy could be is how advanced its physical infrastructure (bridges, ports and primary, secondary and tertiary roads) and digital infrastructure (scope of connectivity and how many people have access to the internet) are. . In this area, Switzerland is once again the leader. This country was one of the first to adopt the 5G frequency and 96% of its population has access to the internet. Likewise, they have 1,840 kilometers of roads that connect the entire country and a railway network that is used by more than 10,000 trains a day.

Particularly, the three countries that follow in the ranking after Switzerland are Nordic: Denmark, Finland and Sweden. Some of the data that supports its position in the table reflects that in Denmark in 2022, 96% of Danish households had access to the internet from a mobile phone and 91% from a computer at home. On the other hand, the construction of the Öresund bridge that connects this country with Sweden has facilitated the transportation of passengers and merchandise thanks to its two train lines and four road lanes that extend for 7.8 kilometers.

Finally, Denmark is the country with the best rating in terms of business efficiency thanks to its score of 100 against Netherlands with 94.9 and Ireland with 94.7. It is the fourth consecutive time that the Nordic nation has held this position. According to its Ministry of Foreign Affairs, its success has focused on the nature of its companies; they have an open and democratic organizational structure.

However, one of Denmark’s areas of improvement lies in its unemployment rate, which stands at 5.24% compared to that of the Netherlands (3.50% as of 2022) and Ireland (4.20%). at the 2022 cut-off), in second and third place respectively.