Singapore is officially the most competitive economy in the world, according to IMD, a Swiss business school.

The report looks at each country's business environment, or how effectively enterprises within that country can achieve sustainable growth and create jobs for the population.

The IMD World Competitiveness rankings was established in 1989, and ranks the economies of 63 countries according to four criteria:

• Infrastructure
• Government efficiency
• Business efficiency
• Economic performance

Singapore first, then Hong Kong and the U.S.

Singapore rose from third spot to first, overtaking the U.S., which dropped to third.

Hong Kong remained in second place, with Switzerland and the United Arab Emirates (UAE) rounding out the top five.

According to the IMD's press release, Singapore's good performance was due to the relative efficiency in setting up a new business, advanced technological infrastructure, the availability of skilled labour and favourable immigration laws.

In contrast, the U.S.'s drop was due to high fuel prices, fluctuations in the value of the U.S. dollar, and weaker high technology exports.

The report added that the boost in confidence from President Donald Trump's tax cuts appears to have faded.

Asia did well, except Japan

The report had mostly good news about the the Asia-Pacific region, with 11 out of 14 economies either rising in the rankings or holding on to their position.

Both Thailand and Indonesia, fellow ASEAN nations, made big gains because of better infrastructure, better efficiency in the government sector and an increase in productivity.

But Japan bucked the trend, falling five places to 30th because of government debt and a weak business environment.

Chan Chun Sing: Good news, but more to be done

Minister for Trade and Industry Chan Chun Sing noted the results of the report on his Facebook page.

He said it was "encouraging news", but Singapore had to persevere with its efforts to create opportunities for people and businesses.

Said Chan:

"We may be ahead today, but our competitors are getting stronger too. To stay competitive, Singapore, as a small and open economy, must ensure that we continue to get our fundamentals right."

To stay ahead of the pack, Singapore needs to stay open to the global economy and ensure its workers are equipped with the right skills.

Otherwise, we might not finish first next year.