KUALA LUMPUR, June 18 — Malaysia is now 34th out of 67 countries in the latest International Institute for Management Development (IMD) World Competitiveness Ranking, after falling seven places since its previous edition.

In the Asia-Pacific region, Malaysia lost four spots to end up 10th out of 14th countries, and placing below Indonesia and Thailand in the ladder for the first time.

Singapore, on the other hand, has regained its status as the world’s most competitive economy, climbing four places from the previous year to surpass Switzerland in second place, followed by Denmark in the third spot.

This is the first time the republic has topped the index since 2020.

Malaysia’s decline was evident across nearly all factors assessed, including economic performance, government efficiency, and business efficiency. Infrastructure was the only measure in which Malaysia maintained its position.

The report further highlighted significant drops for Malaysia in specific areas such as a 19-place fall to 35th in the domestic economy sub-factor and a 17-place decline to 53rd in productivity and efficiency.

Despite the overall decline, Malaysia ranked second in the prices sub-factor and 11th in tax policy, though both were down one place from last year.

Malaysia also slipped two places to end up 10th for the basic infrastructure category.

The report identified five key challenges for Malaysia: increasing investment in research and development to enhance business resilience, optimising the labour market to boost workforce productivity, updating policies and regulations to improve global competitiveness, leveraging advanced technologies to accelerate productivity growth and mitigating rising costs through strategic productivity enhancements.

The IMD World Competitiveness Ranking evaluates the ability of countries to create and sustain an environment conducive to the competitiveness of enterprises.

The current edition measured 67 economies, with each economy’s score derived from a mix of executive perceptions and statistical data.

Executive perceptions were gathered through an online survey conducted from February to May 2024, while statistical indicators were sourced from international, national and regional organisations, private institutions and partner institutes.

For Malaysia, the data was supplied by the Malaysia Productivity Corporation.

The ranking methodology divided the national environment into four main factors: economic performance, government efficiency, business efficiency and infrastructure.