Despite its soaring trade deficit, the US economy has remained the world''s most competitive in a ranking of 55 nations by the Switzerland-based IMD World Competitiveness Yearbook 2007.

>Following the US was Singapore, which displaced Hong Kong to move up from the third rank last year. Hong Kong, Luxembourg and Denmark completed the next three of the top five most competitive nations.

>The study ranks nations by how well they create and maintain conditions favourable to business. Venezuela was ranked as the least competitive nation.

Most competitive economies 2007:
(Figure in brackets denotes 2006 rankings)
1. US (1)
2. Singapore (3)
3. Hong Kong (2)
4. Luxembourg (9)
5. Denmark (5)

>China improved its rankings moving up two places to 15th place, while India remained unchanged at 27th place. Russia rose to 43rd place from 46th, although South Africa slipped back to 50th place from 38th in 2006.

>However, South Africa, Japan, Finland and Australia lost ground, according to the IMD, which uses statistics and survey data to compile its World Competitiveness Yearbook.

The report said the emergence of Russia, India and others as business contenders, with their companies buying industrial assets across the world, was likely to cause unease among European and North American powers.

Emerging giants like China -- which rose from 18th to 15th position in the annual ranking -- and India, 27th -- are also catching up on the United States at a rate of more than 2.5 per cent a year, the report said.

Although Russia is lower down the ranking in 43rd place, its competitiveness has grown by an average of nearly five percent a year over the past decade compared to the United States.

"They will not accept the loss of some of their ''business jewels'' to newcomers without a fight," said IMD professor Stephane Garelli.

"We shall thus face a year of rising protectionist measures. An increase in the number of complaints filed at the WTO for unfair practices can be expected," he added.

In 2007 and beyond, economic relations will be more tense than ever as emerging markets turn into emerging powers and challenge the established order for competitiveness," Garelli said.

>Britain remained at the 20th place in the rankings since 2006.

>Project director Stephane Garelli said the US''s position was supported by the strength of its financial market and the ease with which venture capital for business development could be secured.

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