South Korea Drops to 27th in IMD World Competitiveness Ranking
Improvements in Economic Performance and Government Efficiency,
But Sharp Declines in Business Efficiency and Infrastructure
According to the "2025 World Competitiveness Ranking" released by the International Institute for Management Development (IMD) in Switzerland on June 17, South Korea ranked 27th out of 69 countries evaluated. This represents a drop of seven places from last year's 20th position.
On June 17, IMD announced the results of its global competitiveness assessment. This evaluation was based on key statistics up to 2024 and a survey conducted from March to May 2025. IMD determines the overall ranking by assessing more than 300 detailed indicators across 20 subcategories in four main areas: economic performance, government efficiency, business efficiency, and infrastructure.
By category, "economic performance" (from 16th to 11th) and "government efficiency" (from 39th to 31st) saw improvements in their rankings, while "business efficiency" (from 23rd to 44th) and "infrastructure" (from 11th to 21st) experienced significant declines.
Economic performance improved in international trade (from 47th to 34th), international investment (from 35th to 21st), and prices (from 43rd to 30th). Notably, the growth rate of merchandise exports jumped from 44th to 10th, and private service exports rose from 62nd to 19th. However, employment (from 4th to 5th) and the domestic economy (from 7th to 8th) saw slight declines.
Government efficiency showed marked improvements in public finance (from 38th to 21st), tax policy (from 34th to 30th), and institutional framework (from 30th to 24th). In particular, assessments of "the threat of tax evasion to the economy" (from 65th to 30th) and "pension fund management" (from 55th to 32nd) improved significantly.
On the other hand, business conditions (from 47th to 50th) and social conditions (from 29th to 36th) declined. The political instability category dropped from 50th to 60th. The increase in political uncertainty following the 12·3 Martial Law last year and the worsening business sentiment are believed to have contributed to this decline.
Business efficiency recorded the largest drop among all categories, falling 21 places to 44th. All detailed indicators, including productivity, labor market, finance, management practices, attitudes, and values, declined in ranking. Survey results also showed a clear deterioration in the competitiveness of large corporations (from 41st to 57th) and "use of digital technology" (from 11th to 26th).
Infrastructure also fell by 10 places to 21st. Rankings declined in areas such as digital and technology workforce recruitment (from 28th to 59th), urban management (from 4th to 28th), and education level (from 19th to 27th), leading to an overall weakening of competitiveness.
By country, Switzerland moved up one place from last year to take the top spot. Singapore, which was first last year, dropped to second, and Hong Kong ranked third. Among Asian countries, Taiwan (6th) and China (16th) ranked higher than South Korea, while Japan was 35th. Among the G7 nations, Canada ranked 11th, the United States 13th, Germany 19th, the United Kingdom 29th, France 32nd, and Italy 43rd.
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