Vietnam is now trailing behind most of its neighbors in Southeast Asia in terms of competitiveness as the country's macroeconomic environment has worsened, the World Economic Forum says in a new report.
The country has dropped 10 places to 75th in this year edition of the WEF's Global Competitiveness Report released Thursday.
Over the last two years, it has lost 16 places and is now the second-lowest ranked among eight members of the regional bloc ASEAN covered by the annual report, only ahead of Cambodia.
"As a sign of its fragility and extreme volatility, Vietnam plunges 41 places in the macroeconomic environment pillar to 106th after it had recorded a 20-place gain in the previous edition," according to the report, which graded 144 economies around the world based on 12 categories including tax burdens, transparency of both the government and the financial sector, inflation conditions, and research and development.
This year Vietnam ranks below 50th in all of the 12 pillars, and is "dangerously close to the 100th position on a majority of them," the report said.
It pointed out that access to credit has been made more difficult while infrastructure, strained by rapid economic growth, remains a major challenge for the country.
"Among Vietnam's few competitive strengths are its fairly efficient labor market (51st), its large market size (32nd), and a satisfactory performance in the public health and basic education pillar (64th)," according to the report. "The challenges going forward are therefore numerous and significant and will require decisive policy action in order to put the country's growth performance on a more stable footing."
Switzerland, for the fourth consecutive year, remains the most competitive economy in the world, followed by Singapore and Finland.
The WEF said looking forward, productivity improvements and private sector investment will be key to improving global economies.
The interactive map shows how each of the 144 countries ranks in terms of competitiveness.