Asian tigers Singapore and Hong Kong ranked just behind the US, as they did in 2007. Switzerland jumped two places to fourth, while Luxembourg rounded out the top five most competitive national economies, said the Lausanne, Switzerland-based IMD business school, publisher of the World Competitiveness Yearbook.

"The big question is whether the United States will be No 1 after this year," project director Stephane Garelli said, adding that the report was based on 2007 data that do not fully reflect all of the problems in US financial markets.

"Everyone is catching up very quickly, but so far the US economy is showing a lot of resilience."

The study lists 55 economies according to 331 criteria that measure how the nations create and maintain conditions favorable to businesses.

Rounding out the top 10 most competitive nations were Denmark, Australia, Canada, Sweden and the Netherlands.

China and India both dropped two places in the report, to 17th and 29th, respectively. Russia fell four spots to 49th.

Venezuela was ranked last for the third year in a row, immediately preceded by Ukraine, South Africa, Argentina and Indonesia.