Merkel, who has topped the list of the world's 100 most powerful women in all but one of the years since she became chancellor in November 2005, beat out US Secretary of State Hillary Clinton and, in third place, Dilma Rousseff, who became Brazil's first woman president on January 1 2011.
"German Chancellor Angela Merkel is head of the one real global economy in Europe and is the 'undisputed' leader of the EU," Forbes said.
"Although overseeing a booming economy and falling unemployment, she contends with a weakening support base and crisis in the eurozone, where Germany is often in the unenviable position of bailing out its weaker neighbors.
"She is out to stabilize EU debt and keep the 17-member euro zone unified."
It was Merkel's fifth time at the top of the list.
The 57-year-old politician led it from 2006 to 2009 but then was bumped back to fourth place last year by US first lady Michelle Obama, Kraft Foods chief executive Irene Rosenfeld, and chat-show host Oprah Winfrey.
Clinton, listed fifth in 2010, climbed to the second rung after more than two grueling years as President Barack Obama's top diplomat.
"Clinton continues to earn high marks for advancing US interests and policies overseas and pushing women's issues, development and education to the top of the foreign policy agenda," Forbes said.
After Rousseff was Indra Nooyi, the India-born, naturalized American chief executive of Pepsi; Facebook chief operating officer Sheryl Sandberg; philanthropist Melinda Gates, President of the Indian National Congress Sonia Gandhi, Michelle Obama, International Monetary Fund chief Christine Lagarde, and Rosenfeld.
The list was heavily tilted toward Americans, 65 of the 100 places. Australia, China, India and Britain each had three.
The oldest on the list was Britain's Queen Elizabeth, 85 and ranked number 49; the youngest was 25-year-old pop queen Lady Gaga, ranked eleventh.
Correction: An earlier version of the story incorrectly stated Sonia Gandhi as the president of India. The correction has been made.
COMMENTS (12)
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"India President Sonia Gandhi" hello, we do have a woman president but not Mrs.Gandhi. O ET oye get your facts right bhai.
@amit .. read the article it say India President .. not congress ..
And to Benazir Supporters, the only thing Benazir had more then these ladies was the number of corruption cases on her
@Ovais: Sonia Gandhi is the president of Indian Congress Party.
@Incredible.....we'll talk about Benazir Bhutto later. Tell us first what you did (or let happen rather) to your Indira Gandhi.
@tanoli.
Old racist rhetoric that doesn't hold water. Last I looked Obama didn't have white skin and Gandhi, Mandela, and Martin Luther King are still viewed as hero's in the West.
@ TO ALL IN the west word WORLD is used only for white skin peoples you all need to understand this.
@Rehan: She was so good that you murdered her. Shame!!!!
@Rehan - if Bhutto was so important then please explain why her murderer's are running free - why it took the UN to implement an investigation?
None of these people compares to our Benazir Bhutto! She had more courage, more determination, and more intelligence than everyone on this list combined. Pakistan Zindabad! Warm Regards, Rehan
Sonia Gandhi is not the president of India.
Since when did Sonia Ghandi became the indian president ??
Any Pakistanis on the list?