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Luxembourg drops in competitiveness ranking
Economics

Luxembourg drops in competitiveness ranking

30.05.2013 From our online archive
Luxembourg has dropped to place 13 in the most recent World Competitivness Year Book report, losing one place in the ranking compared to last year.

(CS/alex) Luxembourg has dropped to place 13 in the most recent World Competitiveness Year Book report, losing one place in the ranking compared to last year.

Since Luxembourg first took part in the study in 1997, the Grand Duchy has lost a total of five places in the ranking, which assesses the competitiveness of 60 countries.

The US are at the top of the leader-board, followed by Switzerland, Hong Kong, which was at the top last year, Sweden and Singapore, making up the top five. At the bottom end of the ranking are Jordan, Bulgaria, Croatia, Argentina and Venezuela.

Overall, countries in the eurozone have lost places in the ranking. Director of the IMD World Competitiveness Center, Stephane Garelli, commented that this led back to the austerity debate. While structural reform is necessary, only growth could lead to competitiveness, he said.

The highest ranking eurozone country is Germany (9). The UK ranks 18th, with France coming in place 28.

The success of competitive countries lies in export-oriented and diversified economies, with a strong middle class and sound public finances, the report said. Countries who sank in the ranking, including the Grand Duchy, the UK, France, Finland and the Netherlands, need to adapt their competitiveness strategies to a changing environment, the study found.

For Luxembourg, the IMD identified five key challenges. Prices need to become more competitive compared to trade partners. Additionally, the inflation differential needs to be reduced, and the economy needs to be re-industrialised through education programmes and specific, cost efficient R&D spending.

Furthermore, access to loans for small and medium-sized enterprises needs to be facilitated, the centre said, while lower social spending and a reduction of administrative costs should help balance the state budget.

Last but not least, the Grand Duchy should assess pension payments to establish fairness between the generations.

For the full World Competitiveness Year Book visit imd.org