Portugal drops to 40th in IMD competitiveness ranking

Portugal fell three places to 40th out of 70 economies in the latest World Competitiveness Ranking by Switzerland’s IMD business school, a setback that matters for investors and companies tracking the country’s long-term business environment. Singapore topped the ranking.

Portugal improved in only one of the four pillars assessed: economic performance, where it rose seven places to 35th. That was helped by a stronger showing in international investment, where the country moved to 21st from 33rd, while the domestic economy improved to 49th from 54th. International trade, however, slipped to 25th from 22nd.

In the other pillars, Portugal lost ground. Business efficiency fell to 45th from 42nd, with weaker results in management practices, the labour market and productivity. Government efficiency dropped six places to 41st, with fiscal policy the only area to improve slightly, to 54th from 56th. Infrastructure, still Portugal’s strongest pillar, also declined, falling to 31st from 25th.

The annual study, produced by IMD in partnership with Porto Business School, said predictability in the institutional, tax and regulatory framework continues to weigh on investment and growth decisions. José Esteves, dean of Porto Business School, said Portugal has strong talent and attracts investment, but needs “more agile companies, more effective institutions and leaders prepared to execute better”.

Despite the overall drop, Portugal continued to post strong results in some indicators, ranking fourth globally in tourism receipts, 11th in foreign direct investment inflows as a share of GDP, 12th for low youth exclusion and third for low export concentration by product. Among managers surveyed, skilled labour and cost competitiveness were the most cited factors supporting the country’s attractiveness.

Originally published at Eco.pt