The UK's 'Global Competitiveness' rank just slipped because its macroeconomic environment is worse than Zimbabwe's

The World Economic Forum’s annual Global Competitiveness Report just came out for 2015, and the full document is available here.

It’s closely watched by policymakers around the world — the top spots are jealously guarded by the world’s most advanced economies, while others strive to climb from the lower levels.

This year, Switzerland holds it first place spot, while Singapore and the United States get 2nd and 3rd, the same as was true last year.

But the United Kingdom has dropped into 10th place, from 9th last year. The country is partly held back by an absolutely abysmal score on one of the major parts of the rankings.

The UK beats other advanced economies on a bundle of indicators, but noticeably performs worse on one part than any other.

The UK gets an astonishingly bad ranking on the “macroeconomic environment” sub-index, where it comes 108th out of 140, behind Haiti, Liberia, Zimbabwe and Myanmar.

That seems like a ludicrously terrible placing for the UK, until you see what the index is based on.

Of the five sub-indices that make up “macroeconomic environment” the UK performs well in two, there are three other sub-indices where the performance is even worse than the headline figure.

Here’s what the UK ranks for each element:

  • Inflation: 1st of 140
  • Country credit rating: 14th of 140
  • Government budget balance: 118th of 140
  • Gross national savings: 118th of 140
  • General government debt: 123rd of 140

The last three are abysmal, and way out of step with the rest of the index. The UK comes in the top 20 for the other major indicators, and the top 10 for most — but the stubborn budget deficit and high national debt keep the country weighed down.

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