South Korea climbs in competitiveness rankings

South Korea jumped six spots in the latest global competitiveness rankings, placing 21st among 70 economies. Strong gains in business efficiency lifted the country's overall standing and helped reverse last year's decline in the wake of the martial law turmoil. Economic performance, however, deteriorated, preventing a broader improvement across all categories.

The Switzerland-based International Institute for Management Development (IMD) on Thursday released its 2026 World Competitiveness Ranking, placing South Korea 21st among 70 economies. The country climbed from 27th place a year earlier, marking its second-best showing since it was first included in the survey in 1997. Only its 20th-place finish in 2024 ranked higher.

The rebound came after South Korea fell seven spots last year amid political upheaval following the December 2024 martial law declaration. The Ministry of Economy and Finance said South Korea ranked second only to the United States, which placed 10th, among members of the so-called 30-50 Club, a group of countries with populations exceeding 50 million and per capita income above $30,000.

Business efficiency showed the biggest improvement, rising 10 places to 34th from 44th, while infrastructure advanced to 15th from 21st. The business-efficiency category relies heavily on surveys of domestic companies. Labor productivity improved to 34th from 49th, and large-company competitiveness rose to 48th from 57th. South Korea's ranking for attitudes and values, which includes perceptions of the country's image abroad, jumped to seventh from 24th. Infrastructure gains were driven largely by improvements in technological capabilities.

Economic performance, by contrast, fell to 14th from 11th. The category is based largely on economic indicators. Slower growth and higher consumer prices weighed on the ranking, with real GDP growth coming in at 1.1% last year and food prices rising 3.2%.


Ae-Jin Ju jaj@donga.com