The US should be encouraged by China’s ranking–No. 18 with a rating of 82.182. The mainland’s lack of sophisticated technology and highly advanced manufacturing capacity cause a headwind to its economy that may take years to overcome. Germany, Canada, Sweden, and Taiwan all place above China. Ireland, the UK, France, and Korea were not far behind.
The data indicates that if the US can improve GDP growth and make a dent in high unemployment, it will move back into the top spot and perhaps do so by a large margin. “Creditworthiness” is part of the IMD measurement process, so a drop in the US deficit would also improve the US rank. Not surprisingly, the agency said that high debt levels hurt competitive ranks for Italy, Portugal, Iceland, and Greece. These nations not only have large deficits, but they are highly unlikely to be able to repair their economic problems.
“The quality of debt depends both on the collateral and the capacity to repay. In short, countries such as Greece, Portugal and Spain have a credibility problem today not only because they have a debt crisis, but also because they lack the means to adequately repay (growth rate, current account balance, investments abroad, etc).”, the IMD said The US, at least for now, is not in that category.
Douglas A. McIntyre
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