Thailand's world competitiveness ranking slipped to 30th this year from 29th last year, dragged down by the economic slowdown, reports the "IMD World Competitiveness Yearbook 2015".
Improvement in three factors measured by IMD — government efficiency, business efficiency and infrastructure — failed to offset lower economic performance. Three of the five indices for economic performance — domestic economy, international trade and international investment — declined while employment and prices rose.
IMD is a highly ranked global business school based in Switzerland and Singapore. Its 2015 ranking is based on perceptions of 61 economies as places to do business.
The country is struggling to accelerate an economic recovery after GDP growth measured 0.7% last year, dented by political tension, tepid exports and weak domestic consumption and private investment.
In 2014, Thailand's competitiveness ranking fell two spots to 29th.
Challenges for Thailand this year include stimulating short-term economic growth by promoting alternative sectors to compensate for falling export growth, promoting innovation-driven, high value-added industries for long-term growth, implementing economic restructuring to facilitate income distribution, undertaking necessary political and government reform for social equality, transparency and putting education reform in future agendas.
The US remains at the top of the ranking thanks to strong business efficiency and its financial sector, drive for innovation and infrastructure effectiveness. Hong Kong and Singapore moved up, overtaking Switzerland, which dropped to fourth.
Canada was fifth and Norway seventh, followed by Denmark, Sweden and Germany. Luxembourg vaulted to sixth from 11th in 2014.
Malaysia (12th to 14th), Japan (21st to 27th) and Indonesia (37th to 42nd) also dropped, while Taiwan (13th to 11th), South Korea (26th to 25th) and the Philippines (42nd to 41st) moved up slightly.
"Most Asian economies in decline saw a drop in their domestic economies and were impacted by weakening and ageing infrastructure," the report said.
Aat Pisanwanich, director of the University of the Thai Chamber of Commerce's Center for International Trade Studies, warned that Thai companies' competitiveness, especially for small and medium-sized enterprises, lagged behind its Asean peers.
Restructuring production processes, starting from upstream and including midstream and downstream, is a must to add value and raise the prices of Thai products, he said.