Singapore economy expands by 1.8 per cent in Quarter 1
The skyline of the central business district in Singapore Reuters

Singapore has edged out the United States as the world's most competitive economy. According to the "Global Competitiveness Report 2019," published by the World Economic Forum on Wednesday, the island state reached the top spot among 141 countries and regions.

Singapore scored 84.8 out of a possible 100 points, edging past last year's topper the US, which scored 83.7 points. The other economies that found a spot in the Top Five are Hong Kong, the Netherlands and Switzerland.

While the report hailed Singapore's high performance in areas like the financial system, market efficiency and macroeconomic stability, it also noted that the south-east Asian city state should promote entrepreneurship and further improve its skills base in order to become a global innovation hub.

"Singapore ranks second for the quality of public institutions, behind Finland, but its performance is undermined by limited checks and balances," the report added.

"Despite an overall weaker performance this year, the US remains one of the most competitive economies in the world. It is still an innovation powerhouse, ranking second on the innovation capability pillar and first in terms of business dynamism... and home to one of the most dynamic financial systems in the world."

China stood at the 28th position in the global competitiveness ranking. Among major economies Japan held the 6rh spot and India fell 10 ranks to 68th. Indonesia was at 50 and Thailand held the 40th rank.

The report said the US, the world's largest economy, remained a chief driving force of the global economy. "Despite an overall weaker performance this year, the US remains one of the most competitive economies in the world. It is still an innovation powerhouse, ranking second on the innovation capability pillar and first in terms of business dynamism... and home to one of the most dynamic financial systems in the world."

An economists' poll held by Reuters said earlier this week Singapore's economy has averted a technical recession in the third quarter, amid fears of sluggish growth and tepid inflation, a new Reuters poll has shown.

The poll of 11 economists shows that gross domestic product (GDP) may have increased 1.5 percent on a quarter-on-quarter, seasonally adjusted basis in July-September.

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Singapore Prime Minister Lee Hsien Loong speaks at a special sitting of parliament in Singapore. Parliament House of Singapore/Handout via REUTERS

There have been reports that the Monetary Authority of Singapore (MAS) was likely to ease its exchange-rate based monetary policy at semi-annual meeting scheduled for later this month in view of sluggish growth.

Singapore's economic growth had slowed sharply after the MAS moved out of the neutral stance last April and went for its policy first tightening move in six years.