In the region, only Costa Rica, El Salvador and Nicaragua improved their position in the ranking, while Guatemala and Honduras decreased and Panama remained the same.
The report defines competitiveness as “the set of institutions, policies and factors that determine the level of productivity of a country.” In the case of Nicaragua, the upward shift has been related to “some improvements in its innovation capacity”, according to the report.
Moreover, the report graded Nicaragua with a 3.8 overall score out of a scale of 7, assigned by the WEF. Other highlights of Nicaragua in the report is its government budget balance as a percentage of the country’s GDP, ease of access to loans and venture capital availability, which earned the country the 36th, 42nd and the 29th position, respectively.
This report also took into consideration Nicaragua’s improving economic performance, including its 2012 GDP growth rate of 5.2 percent and foreign direct investment inflows, which reached US$ 1,284 million that same year. Likewise, Nicaragua is the second most globalized country in Latin America after Panama, according to the Latin Business Chronicle’s Globalization Index.
This global competitiveness score is based on three large sub-indexes: basic requirements, which represents 60 percent of the total score and considers institutions, infrastructure, macroeconomic environment, and health and primary education; efficiency enhancers, which accounts for 35 percent of the total score and considers higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, and market size. The third sub-index is innovation and sophistication factors, which stands for 5 percent of the total score and considers business sophistication and innovation.