Switzerland has retained fourth place in world competitiveness but has experienced a "serious drop in its attractiveness" says Lausanne's IMD business school.

In its annual assessment of world economies, the IMD said the flow of investments to Switzerland dropped from 12 per cent of gross domestic product in 2007 to three per cent in 2008.

It commented that as Switerland's main trade partner Germany had announced an "annus horribilis", the effects of the current financial crisis would continue in the coming months.

It added that the deterioration of the labour market, which began at the end of 2008 in the industrial sector, had spread to the service sector, for example, hotels and banks.

But the IMD pointed out that competitiveness was not only measured by GDP, which was 1.6 per cent in 2008.

Compared with many other countries, the fundamental economic, political and financial pillars of Switzerland had shown a "remarkable stability".

It said diversification, quality of life as well as efficiency of the government, businesses and infrastructure confirmed the "excellent position" of Switzerland in terms of competitiveness.

The United States topped the IMD world competitiveness ranking 2009, with Hong Kong coming second and Singapore third.

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