Vietnam moved up five places to secure the 70th position on the 2013-14 Global Competitiveness Report issued by the World Economic Forum Wednesday.
The progress was mainly the result of Vietnam's slightly improved macroeconomic environment, which was ranked 87th among 148 world economies, up 19 positions.
After jumping to almost 20 percent, inflation was back to single-digit levels in 2012, which also emboldened the country's position. The quality of the country's transport and energy infrastructure systems improved also, jumping 13 places to 82nd.
Vietnam also advanced in the goods market efficiency index to 74th, up 17 positions, thanks to lower trade barriers and a lowered corporate tax rate.
Despite these encouraging developments, the foundation of Vietnam's economy and prosperity remains fragile. The country sits below 55th place in every criterion except for market size, in which it was ranked 36th.
It lost ground in several areas of the Index, including labor market efficiency - down five spots to 56th - and financial market development at 93rd, also down five slots.
Another area of concern is technological readiness, where the country slipped four places to 102nd. Although new technologies spread amongst the population, Vietnamese businesses were particularly slow to adopt those technologies, thus forfeiting potentially significant gains in productivity, the report says.
Vietnam's economy is still less competitive than other Southeast Asian countries such as Malaysia (24th position), Brunei (26th), Thailand (37th), Indonesia (38th) and the Philippines (59th), according to the report.
The Forum, which hosts the annual gathering of global business and political leaders at the Swiss ski resort of Davos every winter, ranks a country's competitiveness according to factors such as the quality of its infrastructure and its ability to foster innovation, AP reported.
European countries dominated the top 10: Switzerland, Finland, Germany, Sweden, the Netherlands, and the United Kingdom. The remaining three slots filled by Singapore, Hong Kong and Japan.
The most competitive economy, the Forum said, was Switzerland's, followed by Singapore, then Finland, all three unchanged in their rank from last year.
Germany moved up from sixth to fourth place, reflecting high-quality infrastructure, an efficient goods market and a high capacity for innovation.
The US "” the world's largest economy "” was ranked fifth for overall competitiveness, up from seventh last year.