Saudi Arabia ranks 17th globally in competitiveness index as it outshines economic heavyweights

Arab News

18-06-2025

JEDDAH: Saudi Arabia has maintained its spot in the top 20 of the World Competitiveness Ranking, ahead of global heavyweights the UK, Germany and France.
The Kingdom secured 17th position on the list, driven by strong governance, infrastructure upgrades, diversification, and regulatory reforms.
Issued by the International Institute for Management Development's World Competitiveness Center, the ranking is widely recognized as a benchmark for evaluating how effectively countries utilize their resources to drive long-term economic growth.
Saudi Arabia was placed just behind China in 16th and ahead of Australia in 18th place.
Although this marks a slight drop from 16th in 2024, Saudi Arabia's 2025 ranking represents a significant improvement from 32nd in 2023 and 24th in 2022, underscoring its rising economic stature.
As part of Vision 2030, Saudi Arabia launched the National Competitiveness Center in 2019, with the organization now working with 65 government bodies to drive reforms centered on productivity, sustainability, inclusiveness, and resilience.
According to the World Competitiveness Center, the Kingdom needs to 'continue efforts to promote renewable energy and reduce carbon emissions' and 'carry on enhancing overall competitiveness across multiple pillars.'
Improvement will also come if Saudi Arabia continues to 'invest even more in human capital development across all economic sectors' and push ahead with 'ongoing government endeavors to achieve the targets in the Saudi 2030 vision.'
The IMD report is one of the world's most comprehensive competitiveness benchmarks, evaluating 69 countries across four pillars: economic performance, government efficiency, business efficiency, and infrastructure.
The ranking shows that GCC countries continue to demonstrate their growing economic strength and regional importance, with the UAE leading the group, securing fifth place globally, reflecting its diversified economy and strategic initiatives to attract investment.
Qatar follows in ninth place, supported by substantial infrastructure development and robust financial resources.
Bahrain was ranked 22, Oman came in at 28, and Kuwait was placed at 36, showing steady progress through structural reforms and sectoral investment despite ongoing challenges.
These rankings underscore the GCC's ambition to strengthen global economic resilience and competitiveness.
Switzerland, Singapore, and Hong Kong lead the ranking, while Canada, Germany, and Luxembourg saw the most notable improvements among the top 20 economies.
Saudi focus
According to the IMD, Saudi Arabia has made progress in several key economic areas, although some aspects still require improvement.
On the economic performance indicator, the Kingdom ranks 17th globally with a score of 62.3. Its domestic economy scored 59.2, placing it 25th worldwide, an improvement of six positions from the previous year.
International trade advanced three places to 29th with a score of 56.0, while global investment climbed four spots to 16th with a score of 57.8, signaling increased investor confidence.
However, the employment sector declined slightly, dropping three positions to 29th with a score of 55.6.
Inflationary pressures impacted the prices indicator, which fell eight places to 19th despite maintaining a relatively strong score of 60.7.
These mixed results reflect Saudi Arabia's ongoing efforts to strike a balance between growth and economic stability amid global and domestic challenges.
Public finance indicators remain solid, with a score of 69.5, placing the Kingdom 13th globally, despite a modest three-position drop.
Tax policy holds steady at 67.6 points and 12th place, with a similar three-rank decline. The institutional framework experienced a more pronounced decline, dropping seven places to 27th with a score of 58.6, indicating potential areas for reform.
In contrast, business legislation improved, rising two places to 13th with a score of 67.6, indicating regulatory progress. The societal framework remains a key challenge, ranking 55th with a score of 44.2, representing a nine-position decline, which highlights the need for continued social and structural development to support economic goals.
Saudi Arabia ranked 12th globally in business efficiency with a strong score of 81.4. Productivity and efficiency showed further strength, scoring 66 and placing the Kingdom 15th, up six spots.
The labor market remains a key strength, ranking 9th despite a four-place drop, with a score of 64.2. The finance sector gained three ranks to 19th with 63.4 points, while management practices rose to 17th with a score of 64.
Attitudes and values remain a significant national asset, ranking third globally with a score of 81.6, reflecting a strong culture of resilience and ambition.
Infrastructure continues to show marked improvement. Basic infrastructure ranks seventh globally with a score of 67.6, up two positions. Technological infrastructure rose 10 places to 23rd with a score of 59.5, and scientific infrastructure improved nine spots to 29th with a score of 52.1.
Health and environment indicators gained slightly, moving up one place to 47th with a score of 47.5. Education declined marginally, down one position to 39th with a score of 55.4, signaling an area for continued focus.