For the previous three years, Ireland had risen in the rankings from 28 in 2013 to 23 last year.
Switzerland, the US and Singapore are ranked as the top three countries, followed by the Netherlands, Germany and Hong Kong.
The UK slipped one place to eight. The WEF says it has not yet dropped in the rankings because of its Brexit negotiations with the European Union, but is expected to do so.
China inched up one place to 27, well ahead of Russia (38) and India (40).
At the bottom of the table, at number 137, lies Yemen - a poor country further devastated by civil war, economic collapse, cholera and near-famine conditions.
The World Economic Forum, which compiles the report, is best known for its annual meeting in the Swiss ski resort of Davos.