A panoramic view of the financial area in Hong Kong. (XINHUA)

Hong Kong fell three spots in a ranking of most competitive world economies to No. 5 amid social unrest and an economic downturn that predated the coronavirus.

Singapore was the most competitive economy for the second year in a row, followed by Denmark and Switzerland, according to the annual ranking from the Institute for Management Development, a business school based in Lausanne, Switzerland.

The benefit of small economies in the current crisis comes from their ability to fight a pandemic and from their economic competitiveness.

 Arturo Bris, director, IMD World Competitiveness Center

After losing the top spot to Singapore in 2018, the US dropped further down the list to 10th place from third, dragged down by the weight of President Donald Trump’s trade wars.

The IMD’s rankings, which started in 1989, assess 63 economies on hundreds of indicators: a combination of hard data, such as employment, cost of living, and government spending, and soft data from surveys of international business executives on topics including political stability and protection of intellectual property rights.

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The top five -- Singapore, Denmark, Switzerland, the Netherlands and Hong Kong -- show the strength of smaller economies in weathering global risks, the IMD said.

“The benefit of small economies in the current crisis comes from their ability to fight a pandemic and from their economic competitiveness,” Arturo Bris, director of the IMD World Competitiveness Center that compiles the ranking, said in a statement. “In part, these may be fed by the fact it is easy to find social consensus.”

Singapore earned the top spot because of its robust trade and investment, strong education and technology infrastructure, the IMD said. 

By region, Europe secured a strong showing with half of the top 10 economies hailing from the continent. Denmark came in second based on a strong economy, labor market, health and education systems, as well as international investment, productivity and efficiency. Switzerland edged up to third place based on international trade, scientific infrastructure and its health and education systems.

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The UK climbed four spots to No. 19, which the IMD said could be a sign that Brexit created the perception of a business-friendly environment. Canada moved up to No. 8 from No. 13.

Asia-Pacific economies were weaker than usual, with most slipping from last year’s rankings including a four-spot drop by Japan to No. 34 and Indonesia’s slide by eight notches, to No. 40. India remained at No. 43.

Economies across the Middle East struggled under the weight of the oil-price crisis, with the United Arab Emirates falling four spots to No. 9.