South Korea's national competitiveness rises from 27th to 21st; Taiwan ranks 4th

[Financial News] South Korea's national competitiveness rose six places from a year earlier to 21st out of 70 countries. Among the seven countries in the 30-50 Club, which have per capita income of at least $30,000 and populations of more than 50 million, South Korea ranked second after the United States. Taiwan and China ranked far higher than South Korea, at 4th and 12th, respectively.
According to the Ministry of Economy and Finance on the 18th, IMD released the results of its 2026 competitiveness assessment for 70 countries, including South Korea.
In this year's ranking, South Korea climbed six places from 27th last year to 21st. It was the second-highest ranking after 2024, when it placed 20th.
Among the 70 countries, the top five were Singapore, which moved from 2nd to 1st, Hong Kong from 3rd to 2nd, Switzerland from 1st to 3rd, Taiwan from 6th to 4th, and the United Arab Emirates from 5th to 5th. The United States rose three places from 13th to 10th.
Behind South Korea at 21st were Germany at 23rd, the United Kingdom at 24th, Japan at 30th, France at 36th and Italy at 45th.
South Korea has fluctuated in the 20s for several years. It rose five places from 28th in 2019 to 23rd the following year, then fell to 27th and 28th in 2022 and 2023. In 2024, it climbed to 20th, its highest ranking, before plunging seven places to 27th the next year amid political turmoil, including the declaration of martial law.
Among the 30-50 Club, which includes major advanced economies, South Korea ranked second only to the United States.
IMD evaluates 70 countries, including OECD members and emerging economies such as Vietnam, across four major areas and 341 indicators: economic performance, government efficiency, business efficiency and infrastructure.
By category, South Korea ranked 34th in business efficiency, up 10 places from a year earlier. All five subcategories improved: productivity and efficiency, from 45th to 34th; labor market, from 53rd to 45th; finance, from 33rd to 29th; management practices, from 55th to 49th; and attitudes and values, from 33rd to 18th.
The infrastructure category also improved, rising six places to 15th. Basic infrastructure moved up from 35th to 28th, technological infrastructure from 39th to 27th, health and environment from 32nd to 29th, and education from 27th to 21st. Scientific infrastructure remained at a high level, ranking 2nd.
By contrast, the economic performance category fell three places. Domestic economy dropped from 8th to 10th, while employment slipped from 5th to 7th. Employment was especially weak, marking its lowest ranking since 2020, when it stood at 12th. Price levels saw the sharpest decline, falling from 30th to 40th. International trade improved slightly from 34th to 33rd, and international investment from 21st to 20th.
In response, Kang Giryong, deputy minister at the Ministry of Finance and Economy, explained, "In terms of growth, weaker annual performance due to sluggish economic conditions in the first half of last year acted as a factor behind the drop in ranking." He added, "We will pay special attention to the low evaluation of employment growth and respond accordingly."
Government efficiency was unchanged from a year earlier at 31st. Among the five subcategories, tax policy improved from 30th to 22nd, institutional framework from 24th to 21st, and social conditions from 36th to 30th. On the other hand, fiscal management fell from 21st to 22nd, and business legislation from 50th to 53rd.
IMD has published its competitiveness rankings since 1989, and South Korea was added to the assessment in 1997. The evaluation combines economic indicators and survey responses, but concerns about the objectivity and reliability of the results have persisted because the response rate from Korean companies is below 5%.
Commenting on the results, Kang said, "We look at the overall trend in the assessment and use it as a reference for policy." He added, "We will analyze the strengths and weaknesses of our economy and continue the institutional reforms and innovation efforts now under way to strengthen the country's overall competitiveness."

skjung@fnnews.com Jung Sang-kyun Reporter