The government said on Tuesday that the epidemic situation had dragged down the city’s economic performance, leading to a two-place drop in an annual global competitiveness ranking from last year.

Hong Kong ranked seventh in the latest World Competitiveness Yearbook by the International Institute for Management Development, below Singapore and Taiwan.

In a statement, a government spokesperson noted the city continued to rank second globally in government efficiency but pointed to the upsurge in the epidemic last year for the drop in both business efficiency and economic performance.

“Last year, the Covid-19 epidemic posed daunting challenges to Hong Kong and weighed heavily on our economic performance. As a result, Hong Kong's overall competitiveness ranking fell by two places from the preceding year,” the statement wrote.

“As Hong Kong resumes normalcy and restores full connectivity to the Mainland and the rest of the world, Hong Kong's economy will improve notably this year.”

The spokesperson said the city should be vigilant to the increasingly intense competition among economies and take proactive measures to further enhance its competitiveness, noting that the administration had already launched several initiatives to this end.