KUALA LUMPUR: The US has plunged seven places to 10th while Malaysia falls five spots to 27th in the IMD World Competitiveness Ranking 2020.
The ranking was released today by the Institute for Management Development, which analyses global economies and their ability to generate prosperity.
Singapore retained its number one position for the second year in a row.
Making up the top five are Denmark, Switzerland, the Netherlands and Hong Kong.
"As a group they illustrate the current strength of many small economies," IMD said in a statement.
With the exception of Singapore, the Philippines, Taiwan and South Korea, most Asian economies dropped in rankings this year.
The reason for the Asian economies' less stellar performance as a region is partly the result of the trade frictions between China and the US, particularly because these economies are highly dependent on trade with China.
Therefore, any negative economic repercussions felt in China also ripple to other countries in the region, the IMD said.
Arturo Bris, director of the IMD World Competitiveness Centre and professor of finance, said the benefit of small economies in the current crisis came from their ability to fight a pandemic and from their economic competitiveness.
"In part these may be fed by the fact it is easy to find social consensus."
The ranking results are the combined fruit of a responses in the first quarter of 2020 from
business executives on questions about how they perceive their country's economy and hard data from 2019.
The IMD said factors behind Singapore's success were its strong economic performance which stemmed from robust international trade and investment, employment and labour market measures.
Stable performances in both its education system and technological infrastructure – telecommunications, internet bandwidth speed and high-tech exports – also play key roles.
For the second year in a row, the US failed to fight back having been toppled from its number one spot last year by Singapore, and coming in at 10th (3rd in 2019).
Trade wars have damaged both China and the US' economies, reversing their positive
growth trajectories. China dropped to 20th position from 14th last year.
Elsewhere in the Americas, Canada moved up to 8th from 13th , while a quick pan-Asian check sees Hong Kong tumble from 2nd in 2019 to 5th.
The IMD said this can be attributed to a relatively deficient performance of its economy, employment and societal framework.
"The underlying strengths of the economy, however, remain in place," it added.
The UK climbed from 23rd to 19th, as neighbour France lost its foothold on 31st, having to settle this year for 32nd.
"One interpretation is that Brexit may have created the perception of a business-friendly environment," the IMD said.
Economies showing noteworthy year-on-year consistency include Germany (17th), Australia (18th) and India (43rd ).
The IMD said an eye-catching rebound came for Greece, up to 4th from 58th with government efficiency to thank.
The Middle East struggled, reflecting the oil crisis, with the UAE leading the region
of Western Asia and Africa in 9th , although it was 5th in 2019.
Qatar (14th) and Jordan (58th) dropped marginally, while Saudi Arabia proved the exception by climbing up two spots to 24th.