Hong Kong has been ranked the world’s third-most competitive economy, rising two spots from last year, with Chief Executive John Lee Ka-chiu crediting the improvement to greater government efficiency driven by civil service reforms.

According to the latest World Competitiveness Ranking released on Tuesday by the Switzerland-based International Institute for Management Development (IMD), Hong Kong earned a score of 99.2 out of 100.

The city outperformed 66 other economies, with only Switzerland and Singapore scoring higher, South China Morning Post reports.

“This is also the first time Hong Kong is back in the top three since 2019,” Lee said during a press briefing ahead of his weekly Executive Council meeting.

The index evaluates 69 economies based on four key pillars: economic performance, government efficiency, business efficiency, and infrastructure, each further divided into five subcategories.

John Lee highlighted that Hong Kong ranked first in tax policy and expressed that he was “encouraged” by the city’s second-place ranking in government efficiency, trailing only Switzerland.

In this year’s index, Switzerland claimed the top position, overtaking Singapore.

Meanwhile, Hong Kong saw improvements in several areas, including public finance, tax policy, and its institutional framework.

“The increase in our overall score and improvements in many aspects show that the government’s policies are moving in the right direction,” Lee said.

“This proves that the quality and capability of Hong Kong’s civil service are excellent and reaffirms my decision to reform the governance culture to be ‘results-oriented’ and is starting to bear fruit.”

Furthermore, according to this year’s index, Hong Kong ranked sixth in economic performance, second in business efficiency, and seventh in infrastructure.

The city claimed the top spot for business legislation and placed second in international investment, finance, and education.

Notably, under the business efficiency category, Hong Kong rose 10 places from last year in the “attitudes and values” subcategory.

The rankings are calculated using a blend of statistical data and perceptions from business executives, allowing the index to assess competitiveness through both quantitative and qualitative measures.

“These gains reflect a broad-based approach to attracting private sector investment,” the International Institute for Management Development said.

“As an indication of how to improve further, executives view auditing and accounting practices in Hong Kong as less and less adequately implemented in business.”