Singapore has reclaimed its position as the world’s most competitive economy for the first time since 2010, signaling a strategic rebound in the city-state’s economic and policy fundamentals. The 2025 global competitiveness ranking, released by the International Institute for Management Development (IMD), highlights Singapore’s strong infrastructure, skilled labor force, favorable immigration policies, and efficient business formation processes.
Singapore secured top-five positions in three out of the four main categories: fifth in economic performance, third in government efficiency, and fifth in business efficiency. It ranked sixth in infrastructure—underscoring a well-rounded national capability that blends technological prowess with policy agility.
This development places Singapore ahead of other major economies, with Hong Kong retaining the second spot due to its favorable tax regime, business-friendly environment, and capital access. The United States fell to third after leading last year, while Switzerland and the United Arab Emirates rounded out the top five.
IMD’s report casts Asia as a rising force in global competitiveness, noting that 11 out of 14 Asian economies either advanced or held their positions. Indonesia made the most dramatic leap in the region, climbing 11 spots to 32nd place, driven by improvements in government efficiency, infrastructure, and business conditions.
Thailand rose five positions to 25th, fueled by stronger foreign direct investment (FDI) flows and productivity gains. Other Asian risers include Taiwan (16th), India (43rd), and the Philippines (46th). However, China and South Korea slipped one place to 14th and 28th respectively, while Japan dropped five places to 30th, hindered by persistent economic stagnation, public debt, and a softening business climate.
Singapore’s Minister for Trade and Industry, Chan Chun Sing, responded to the report by emphasizing the nation’s long-term strategic outlook. “Singapore cannot compete on cost or scale. Our edge must come from connectivity, quality, and innovation,” he said. “To stay competitive, we must continue refining our fundamentals and serve as a trusted hub for global collaboration.”
He added that Singapore must diversify its economic links, remain open to talent and technology, and uphold its reputation as a safe and credible environment for investment and cross-border cooperation.
This year’s competitiveness ranking reaffirms a broader shift: Asia is no longer just the world’s factory, but a strategic hub of policy innovation, human capital, and digital advancement. For economies like Singapore, the challenge now lies in sustaining this momentum while navigating geopolitical complexity, global market volatility, and technological disruption.
