Ireland has been ranked 23rd out of 138 counties in an index of global competitiveness by the World Economic Forum.

This is a rise of one place compared with its 2015 ranking and it marks the third year in succession in which Ireland has increased its ranking, having slipped to 28th place in 2013.

The country is ranked the eighth most competitive economy in the euro zone, and the 11th most competitive in the EU28.

"Ireland's performance in these rankings is improving but is still being negatively affected by macroeconomic legacy issues and threats to present and future competitiveness are evident in relation to infrastructure and access to finance," the National Competitiveness Council (NCC) said.

The most notable change in Ireland’s ranking was in relation to its macroeconomic performance, with the country rising from 87th to 43rd place in the index.

Strengths and weaknesses

Ireland performed well in relation to goods market efficiency (ranked fifth), labour market efficiency (12th), technological readiness (12th), institutions (12th), health and primary education (13th), and higher education and training (13th). Weaknesses, however, are evident in relation to infrastructure (29th), the macroeconomic environment (43rd), market size (54th), and financial market development (67th).

Switzerland topped the list for the eighth consecutive year, followed by Singapore, the United States, Germany and the Netherlands. The United Kingdom moved up three places to seventh, however, the data was taken before the Brexit vote.

According to the latest report, there is a continued decline in openness of economies that is threatening growth and prosperity. The study’s authors said monetary stimulus measures such as quantitative easing were not doing enough to sustain growth and must be accompanied by competitiveness reforms.

"Declining openness in the global economy is harming competitiveness and making it harder for leaders to drive sustainable, inclusive growth," said Klaus Schwab, founder and executive chairman of the World Economic Forum.

IDA Ireland chief executive Martin Shanahan said on Wednesday night that the improved ranking was positive, noting that “rankings matter a lot to us in the FDI business”.

Ireland’s improved ranking was also welcomed by Chambers Ireland, where chief executive Ian Talbot emphasised the importance of protecting competitiveness.

“We are encouraged to see the improvement in Ireland’s international competitiveness ranking by one place to 23rd, largely due to our improved macroeconomic environment and stable fiscal performance,” Mr Talbot said.

“Protecting and improving all aspects of our international competitiveness is vital to attract investment but it is particularly worrying, if not surprising, to see Ireland’s infrastructure score drop in ranking by two places this year.”

He called for the Government to address threats to competitiveness in the forthcoming budget.

“This report highlights the importance of investing in the infrastructure necessary for our economy to grow,” he said.

Chambers Ireland has used its pre-budget submission to urge greater investment in housing, water, transport and broadband.

“Substantial and sustained capital investment is needed for Ireland to stay competitive,” said Mr Talbot.