World Competitiveness Rankings 2024
Australia’s competitiveness on the global stage is recovering, though it remains short of previous peaks
The International Institute for Management Development (IMD) have published their World Competitiveness Rankings for 2024. This list analyses and ranks the capability of 67 countries to create and maintain an environment which sustains the competitiveness of enterprises. A country’s competitiveness is assessed based on four criteria: economic performance, government efficiency, business efficiency and infrastructure. A more detailed breakdown of these factors can be found on the IMD website here.
Australia placed 13th in the rankings this year, up from 19th in 2023, and our highest ranking since 2011. This is still lower than our performance from 2002 to 2011 – during which time we were consistently ranked among the top 10 countries – but Australia’s business competitiveness is improving from a COVID-era trough.
Chart 1: Australia’s performance in the World Competitiveness Rankings
Source: Institute for Management Development (IMD) and Committee for Economic Development of Australia (CEDA)
Of the four criteria, economic performance generally tends to be Australia’s strongest performing indicator, and in 2024 Australia ranked 5th on our terms of trade, 8th for real GDP growth, and 14th for long-term growth in employment. Australia’s strong commodity exports underpinned our high terms of trade, but other export-related indicators performed poorly, including our trade to GDP ratio (59th) and high concentration of export partners (58th). Inflationary pressures also remain a cause for concern, with Australia ranked 42nd when assessing the cost-of-living index. Australia’s central bank may be one of the last in the developed world to move to cutting interest rates, given stubborn inflation pressures.
Australia’s government efficiency rating improved to 13th place in 2024. It retains the top credit rating, ranking 1st for the third consecutive year. Australia supports new businesses, ranking 5th in start-up days and 6th in start-up procedures. However, the tax regime needs reform, with rankings of 57th for corporate tax rates, 55th for personal income taxes and 32nd for total tax revenues. These results align with broad tax reform calls to reduce the government’s reliance on personal income taxes.
Business efficiency is still a weak point, with Australia placing 22nd overall. Though credit availability is good (ranked 7th) and corporate debt does not impair businesses (ranked 8th), Australia’s entrepreneurship and workforce productivity are poor, and we placed 61st and 48th respectively. The lack of productivity growth in has lengthened Australia’s cost of living crisis, with wage growth failing to offset continuing price growth.
Australia's infrastructure performance remains steady, ranked 18th in 2024, up from 20th in 2023. Strong public investment is evident in rankings for environmental agreements (1st), university education (7th), life expectancy (8th) and universal health coverage (9th). But we still have low internet bandwidth speeds (50th), poor communications technology (45th) and lacklustre investment in telecommunications (40th) – a result hardly befitting the legacy of the country responsible for inventing Wi-Fi. Australia was also ranked 49th for renewable energy, and 47th for our energy infrastructure, both key areas to tackle as part of the green energy transition.
In conjunction with CEDA, the IMD has also identified challenges that Australia faces in improving its economic performance and competitiveness. Australia needs to address housing affordability, and ensure dwelling construction keeps up with our population growth. There is also a need to lift productivity growth, to improve living standards and place some downward pressure on prices, while successfully navigating a clean energy transition remains.
This newsletter was distributed on 13th August 2023. For any questions/comments on this week's newsletter, please contact our authors:
This blog was co-authored by Himaushu Hardikar, Economist at Deloitte Access Economics
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