Portugal up one place to 36th in 2021 IMD World Competitiveness Ranking

Portugal has risen one place to 36th in the latest World Competitiveness Ranking compiled by the Institute for Management Development (IMD), a business school based in Lausanne, Switzerland, while performing worse on two key indicators, economic performance and governance efficiency, according to information released on Thursday.

In a statement, the IMD reports that in contrast with neighbouring Spain, which fell from 36th to 39th place, Portugal rose one position in the 2021 ranking compared to 2020 and, despite the decline in the rankings relating to economic performance (from 41st to 43rd position) and government efficiency (from 34th to 38th position), jumped from 41st to 38th in business efficiency and retained the 27th in the area of infrastructure.

With regard to the sub-criteria linked to these four key indicators, Portugal obtained better results in the social environment (20th position), health and environment (23rd position), business legislation (27th position) and education (29th position), reports the IMD, stressing that the country’s weak points remain public finances (54th position), tax policy (53rd position), management practices (51st position) and the domestic economy (49th position).

The ranking to what extent each of 64 economies around the the world promotes the prosperity of the population, based on a combination of statistical data provided by national organisations and surveys of executives operating in each country, says the IMD, noting that in Portugal, executives highlight positive factors such as skilled labor, cost competitiveness, reliability of infrastructure and open and positive attitudes.

But according to the study, Portugal faces a number of challenges in 2021.

“In addition to ensuring GDP growth above the European average and adopting a tax and regulatory policy favorable to business and investment, the country should develop a strategy for digital transformation and reform the justice, health, education and social security sectors,” it argues, also highlighting “the urgency of a cross-party agreement for a national strategy to deal with the country’s demographic problems, such as the aging population, low birth rate and migration.”

According to experts from the IMD’s World Competitiveness Center, the best performing countries are characterised by investment in innovation, diversification of economic activities and supportive public policies, with work done in these areas before the pandemic having enabled them to cope more efficiently with the economic impact of the crisis.

In the 2021 ranking, Switzerland is named as the world’s most competitive economy, having climbed two places from last year. The country is said to have vastly improved its economic performance, particularly in terms of international investment and employment.