Luxembourg's competitiveness has plummeted to a historic low, dropping 10 spots to rank 23rd out of 60 countries in the latest World Competitiveness Yearbook, largely due to poor economic performance and high work costs.

Luxembourg lost 10 spots on the World Competitiveness Yearbook in the past two years, now ranking 23rd out of 60 countries on the list, the lowest result in history. The Yearbook, first issued in 1989, is an annual report published by the Swiss-based International Institute for Management Development (IMD) on the competitiveness of nations.

The IMD ranking analyses four competitiveness pillars, and the reason for Luxembourg's dismal performance is mainly due to one on economic performance where the country only ranks 57th.

Historically speaking, Luxembourg has always done well in economic performance analyses and topped this very list only two years ago. Once rampant inflation hit the country, however, matters started to go downhill. Reasons are thought to be the growth span as well as the decrease in international investments.

Another pillar where Luxembourg lost ground is business efficacy. Here, above-average work costs, which are higher in the Grand Duchy than anywhere else in the EU, are considered to be the main reason for the result.

The three top-performing countries in the ranking are Singapore, Switzerland, and Denmark. The Netherlands rank ninth, Belgium 18th. Germany ranks 24th, so one spot below Luxembourg. The European Union as a whole fell 45 places.