New Zealand has lost more ground in a world ranking of economic competitiveness, with corporate governance and research and development cited as two of the major weaknesses.

The annual ranking by the International Institute for Management Development (IMD), a top Swiss business school, placed New Zealand 25th out of 60 countries. That represents a steady decline from 11th spot in 1997, 15th in 2009 and 24th last year.

New Zealand's slide placed it in a group which had lost more than five spots since 1997, said IMD.

Business executives told IMD that New Zealand's access to financing, cost competitiveness, quality of corporate governance, R&D culture and dynamism of the economy were its least attractive characteristics.


On a more positive note, its policy stability and predictability, and business-friendly environment were seen as the most attractive features.

New Zealand came out on top in terms of ease of starting a business, fixed telephone tariffs and redundancy costs. Low tariff barriers, a lack of bribery and corruption and government subsidies were listed as other strengths.

In the sub-categories the country came 59th for direct overseas investment, 56th for exchange rates and 56th for fixed broadband tariffs. It also scored poorly for the current account balance and mobile phone costs.

IMD said the biggest challenges facing New Zealand this year would be continuing to recover from the Canterbury earthquake, building a nationwide broadband network "to underpin growth", and strengthening the economy's productivity performance.

Returning to a budget surplus by 2014/15 and building better public services through restructuring in high spending sectors were other challenges.

IMD ranks countries according to four main categories - economic performance, government efficiency, business efficiency, and infrastructure.

New Zealand's highest ranking was in government efficiency (10th) and lowest was in economic performance (40th).

The United States regained the top spot and the top European nations were Switzerland (2), Sweden (4) and Germany (9). Others in the group which had lost significant ground since 1997 included Argentina, Brazil, France, South Africa and Britain.


To see a full run-down of how countries stacked up, go here.