Korea's global competitiveness ranking climbed one notch from last year to 22nd among 59 countries, according to the 2011 World Competitiveness Yearbook released on Wednesday by Switzerland-based business institute IMD.

The new standing is the highest that Korea has achieved since IMD first issued the annual report in 1997.

Korea, which had hovered around 30th during the mid-2000s, has seen its ranking climb for the past three years, from 27th in 2009 to 23rd in 2010 and again this year.

The latest rise is attributable to enhanced government efficiency including public finance and fiscal policy, with the ranking for the sector rising from 26th to 22nd. In particular, the government budget improved significantly, swinging from a US$17.1 billion deficit to a $14.1 billion surplus.

The country also scored better in business efficiency at 26th, up one notch from last year, while increased exports pushed its standing in international trade up from 22nd to 16th. But prices and employment fell from 41st to 52nd and 4th to 6th, respectively.

The U.S. and Hong Kong, which ranked second and third last year, shared the top spot this year, while former No. 1 Singapore slid to third. Japan, which suffered a 10-notch drop last year, edged up a notch to 26th while China fell one to 19th.