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Shipping containers are stacked at a port terminal in Busan. / Yonhap News

South Korea dropped seven spots to rank 27th in the latest World Competitiveness Ranking released by the International Institute for Management Development (IMD) in Switzerland, largely due to a sharp decline in corporate efficiency.

According to the Ministry of Economy and Finance on June 17, Korea placed 27th among 69 countries in IMD's 2025 World Competitiveness Ranking, falling from last year’s record-high 20th place.

The steepest fall was seen in the area of business efficiency, where Korea plummeted from 23rd to 44th—down 21 spots. This was driven by weaker performance across all five subcategories: productivity, labor market, finance, management practices, and attitudes and values.

In particular, the competitiveness of large enterprises declined from 41st to 57th, while businesses’ responsiveness to opportunities and threats dropped from 17th to 52nd.

The infrastructure category also took a hit, falling from 11th to 21st. Rankings dropped in all subcategories: basic, technological, scientific, healthcare and environmental, and educational infrastructure.

Among the key weaknesses cited were inefficient urban management and distribution infrastructure, limited availability of digital and technical talent, and insufficient cyber security capabilities. In education, Korea’s rankings for primary, secondary, and higher education also fell.

On the other hand, Korea saw gains in economic performance and government efficiency. Economic performance rose five places to 11th, while government efficiency improved eight spots to 31st.

Switzerland topped the global rankings this year, with Singapore falling to second and Hong Kong coming in third. Among Asian countries, Taiwan ranked 6th and China 16th—both ahead of Korea—while Japan was ranked 35th.