South Korea’s Global Competitiveness Takes a Nosedive: What Went Wrong?

The Finance Ministry reported that South Korea’s global competitiveness ranking plummeted seven places to 27th worldwide, according to the 2025 report by the International Institute for Management Development (IMD), a Swiss-based business school. The report, which evaluated 69 countries, marks Korea’s steepest decline since IMD began assessing its competitiveness in 1997.

South Korea had reached a record high of 20th place in 2024 but has now slipped back to 27th, the same position it held in 2023. IMD evaluates national competitiveness based on four main categories: economic performance, government efficiency, business efficiency, and infrastructure.

The most dramatic decline was in business efficiency, where Korea plunged to 44th, down 21 spots from the previous year, dragging down its overall ranking. Other subcategories also saw significant drops, including productivity, labor market, and finance.

In the 2025 rankings, Switzerland claimed the top spot, pushing Singapore to second place. The United States ranked 13th, while Japan came in at 35th.