Austria Maintains Position at 26th in IMD Competitiveness Ranking

In the latest assessment by the Lausanne-based IMD (International Institute for Management Development), Austria has once again secured the 26th position in the World Competitiveness Report, remaining stagnant compared to the previous year. This ranking evaluates the performance of 69 economies globally.

Austria's performance was notably poor in areas related to economic development and government efficiency, where it ranked 40th in both categories. Conversely, the country received commendations for its business environment and particularly its infrastructure, achieving a ranking of 14th.

This year, Switzerland claimed the top spot in the IMD rankings, followed by Singapore and Hong Kong. Denmark and the United Arab Emirates rounded out the top five. The United States, which was ranked 9th in 2023, fell to 13th place, while China was positioned just behind at 16th. Germany saw an improvement, rising five places to rank 19th. At the bottom of the list are Mongolia, Turkey, Nigeria, Namibia, and Venezuela, which holds the last position.

The IMD report highlighted several declines in Austria's economic indicators compared to the previous year, including an increase in the deficit, slowed growth, and a significant drop in patent applications. The country also faced challenges with rising homicide rates and declining population growth. Additionally, the IMD pointed out issues with the resilience of the economy and the flexibility of the government. Austria's tax policy was particularly criticized, ranking 64th, with the report noting inadequate support for unemployed individuals and insufficient adaptability in legislation.

Despite these setbacks, there were improvements in several areas, such as a higher frequency of university education, increased employment growth, declining inflation rates, and increased tourism revenue. The IMD also noted a reduction in state subsidies and improved water utilization efficiency. Business leaders surveyed identified reliable infrastructure, well-educated labor, comprehensive education systems, a dependable legal framework, and political stability as Austria's primary strengths.

The IMD emphasized that a key focus for government policy should be to counteract fragmentation within society. Countries with lower levels of socioeconomic and political polarization, such as Switzerland, Denmark, and Sweden, tend to achieve better competitiveness scores. A robust currency was also deemed essential; while weaker currencies can facilitate exports, a strong currency reflects solid economic fundamentals, investor confidence, stable governance, and the presence of high-quality export companies capable of withstanding price pressures.