Thailand's world competitiveness ranking this year rose two notches to 28th thanks to improvements in key criteria such as political stability and policy flexibility, said the International Institute for Management Development (IMD).
Improvements included government policy, real GDP growth per capita, exchange rate stability and decreased risk of political instability. But exports, stock market capitalisation and tourism receipts showed declines.
The IMD World Competitiveness Center, a research group within the IMD business school, has published the rankings each year since 1989. The 2016 edition ranks Hong Kong at the top, surpassing Switzerland. The US fell to third, followed by Singapore, Sweden, Denmark, Ireland, the Netherlands, Norway and Canada.
Despite weak exports, the Thai government is confident public spending and infrastructure investment will boost economic growth this year to 3-3.5%, up from 2.8% in 2015.
The survey of executive opinion also rates economies on criteria such as how business-friendly the environment is, openness and positivity, the skill level of the workforce, the reliability of infrastructure and overall dynamism.
Challenges for Thailand this year include accelerating investment in infrastructure megaprojects, inclusive political, social and education reform to align with the development needs of the country, and developing transport and logistics systems and optimising its Asean supply chain linkage to strengthen competitiveness.
Arturo Bris, director of the centre, said a consistent commitment to a favourable business environment was central to Hong Kong's rise and Switzerland's small size and emphasis on quality had allowed it to react quickly when needed.
"The USA still boasts the best economic performance in the world, but there are many other factors we take into account when assessing competitiveness," said Mr Bris.