Economies boasting credible institutions are better positioned to tackle today’s volatile and fragmented world, the 2026 IMD World Competitiveness Ranking finds. This signals a shift in the drivers of competitiveness from the traditional emphasis on cost, scale, and output.
“Geopolitical conditions are worsening, and global fragmentation is increasing,” said Arturo Bris, Director of the World Competitiveness Center. “Nations with their own tried and tested, credible institutions gain an advantage in this context because – as the international systems cease to serve so many national needs – businesses can carry on as usual.”
The report ranks the competitiveness of 70 global economies, with Singapore, Hong Kong SAR, and Switzerland taking the top three spots.
Singapore’s return to first place (after coming first in 2024, then second in 2025) highlights how quickly agile economies can regain momentum. Its rise is driven by a broad recovery across several areas of competitiveness, with Business Efficiency leading the way. Economic Performance fell two positions to third, however, while Government Efficiency held steady in third and Infrastructure gained one place to rank fifth.
Hong Kong’s rise reflects sustained performance across four competitiveness factors measured: Government Efficiency, Infrastructure, Economic Performance, and Business Efficiency. Government Efficiency remains its defining competitive strength, keeping second place for the second consecutive year.
Switzerland’s sharp drop in Economic Performance – driven by a severe deterioration in direct investment flows – demonstrates that even the strongest economies remain exposed to geopolitical and investment shocks. A high-cost environment and negative long-term employment growth further weighed on the economy’s ranking result.
A new policy agenda for competitiveness
The rule of law is a recurrent theme throughout the 2026 report and is defined by the WCC as the extent to which public authority is bound by established rules, private rights where obligations are enforceable, and administrative decisions are sufficiently predictable.
“Rule of law deserves a leading role today as part of the institutional operating system that allows competitiveness to endure even when put under stress,” says Bris.
Upholding the rule of law makes policy implementation predictable and economic signals credible, which in turn boosts competitiveness outcomes.
As such, the report provides governments and business leaders with a policy agenda of suggested action points. These include how and why to enforce and not just legislate, to achieve judicial independence, to carry out credible international commitments, and to protect business confidence on an institutional level.
No straight road to confidence among firms
The report also explores the extent to which economic pressures are affecting business confidence, drawing on a survey of 6,900 global senior executives that feeds into the ranking results alongside hard economic data. The WCC defines business confidence as the mindset that shapes how firms process information and translate it into decisions on investment, hiring, and innovation – not merely a measure of sentiment.
The 2026 survey, conducted over three months, shows that business confidence is rarely driven by a single factor. Instead, it reflects distinct combinations of pressures that vary by economy. In Nigeria, executives point to reinforcing economic and institutional constraints, including high transportation costs, inadequate infrastructure, energy shortages, limited access to credit, and concerns about insecurity. Chinese executives, by contrast, voice weak domestic demand and global uncertainty as the primary drags on business confidence, with inflation seen as less significant. In the US, the return to the top 10 is underpinned by a sharp rebound in executive sentiment, suggesting that business confidence has rebounded more quickly than underlying fiscal and trade fundamentals.
The 2026 ranking comprises 92 survey questions and 172 pieces of hard data. Vietnam entered the ranking for the first time.
The booklet version of the report and abridged economy profiles are available online with open access, while the full report and extended economy profiles can be purchased in digital or physical formats via the WCC e-shop.
