GENEVA - Canada has moved up two notches to 13th position in the latest Global Competitiveness Report issued Wednesday by the Geneva-based World Economic Forum.

The report says Canada improved its ranking mainly because of a lower budget deficit based on 2014 data and a more favourable assessment of its financial market development.

It says Canada's competitiveness is also built on such areas as "highly efficient labour markets" and a sound banking system, but cautions that exposure to a potentially overvalued housing market could become a risk in the near future.

The WEF says that in order to counter the effects of lower energy prices, "Canada should continue to foster innovation at the company level." The report says Canadian company spending on R&D is ranked 26th and its capacity to innovate is 23rd.

Overall, says the report, global economic growth remains low and unemployment "persistently high" despite efforts to re-ignite a recovery in the seven years since the beginning of the world financial crisis in 2008.

The agency says the recovery has been "less robust, more uncertain and taken longer than many expected," suggesting a "new normal" of subdued economic growth, lower productivity growth and high unemployment.

It adds that recent geopolitical shocks - from the crisis in Ukraine to conflicts in the Middle East, terrorism and the migrant crisis - have added to the world's economic difficulties.

Switzerland remains No. 1 on the list, a position it has held since 2007. Singapore is second in the annual ranking, followed by the United States, Germany and the Netherlands.

The bottom five consists of Burundi, Sierra Leone, Mauritania, Chad and last-place Guinea.