The figures are based on official statistics and interviews with over 11,000 people in leading positions around the world.
The other countries in the top ten are Denmark, Singapore, the US, Japan, Germany, Holland and the UK. America has slumped from first place last year to sixth this year, the biggest fall in the ranking.
Among EU countries, Poland, ranked 48, fared the worst, just behind Greece in 47th place. Estonia was ranked 25th, the Czech Republic 29th and Slovenia 33rd.
Switzerland and the Nordic countries were commended for their efficient public authorities and competent economic management, as well as world-class educational institutions and a focus on technology and innovation.
“Countries that, like the Nordics, are investing heavily in education are likely to see rising levels of income per capita, growing success in reducing poverty and an increasing ability to establish a presence in the global economy,” said Augusto Lopez-Claros, Chief Economist and Director of the World Economic Forum’s Global Competitiveness Network.
Sweden’s position on the Business Competitive Index, a sister rating focusing purely on business conditions in 121 countries, was seventh.
Despite being ranked third for ‘sophistication of company operations and strategy’, Sweden came eighth for the ‘quality of the national business environment’.
High tax rates and restrictive labour regulations were highlighted as the most problematic factors for doing business in Sweden.