WASHINGTON – The Heritage Foundation released its latest edition of the annual Index of Economic Freedom today. The 2025 Index, which covers economic policies and conditions in 184 countries from the second half of 2023 to the first half of 2024, reveals a weak world economy that, taken as a whole, remains “mostly unfree,” with a global economic freedom rating of 59.7 out of 100.
The cumulative downward pressure on the world economy is marked by the lingering impact of ill-advised economic policy choices over the recent years, higher inflation fueled by wasteful spending, and ongoing conflicts in Europe and the Middle East, among other economic and geopolitical tensions. Globally, fiscal soundness has deteriorated, with rising deficits and mounting public debt in many countries undercutting their overall productivity growth.
Despite the challenging global economic environment, Singapore held its position as the world's most-free economy, Switzerland followed closely behind at second, and Ireland (3), Taiwan (4), and Luxembourg (5) rounded out the top five.
The Paraguayan economy has recorded one of the largest economic freedom score increases in the 2025 Index and has undergone a notable expansion. The reform-minded Santiago Peña administration, which took office in August 2023, has pursued a series of legislative reforms to enhance the overall entrepreneurial environment and develop a stronger private sector to generate broader-based job growth.
America’s economic freedom remains only “mostly free,” this year reaching one of the lowest ratings in the history of the Index at 70.2. The U.S. ranking has dwindled to 26th freest in the 2025 index, the worst position that the U.S. economy has ever held. The Biden administration's misguided anti-growth entrepreneurial policies and mounting deficit spending over the past four years resulted in this decline.
North Korea, Cuba, Venezuela, Zimbabwe, and Sudan remained the world's least economically free nations.
Dr. Kevin Roberts, president of The Heritage Foundation, said of the 2025 Index:
“It is long past time to put the American people first. For too long, the policy agenda in Washington has been defined by well-connected special interests that have severely undercut economic freedom for ordinary hardworking Americans.
“But on November 5, 2024, the American people spoke up and unambiguously rejected the failed liberal status quo. The reelection of Donald Trump has placed our country at the dawn of a new era. Today, by that dawn’s early light, we can already see the prosperous, cheerful, energetic future it portends. We must take this window of opportunity to act with courage and confidence. As we show in the 2025 Index of Economic Freedom, an annual flagship publication of The Heritage Foundation, the imperative to revitalize America’s economic freedom and vibrant entrepreneurial growth is stronger than ever.”
Anthony Kim, research fellow and editor of the Index of Economic Freedom at The Heritage Foundation, added:
“There continues to be a clear positive relationship between greater economic freedom and higher economic dynamism that leads to greater human flourishing. The stark difference between Taiwan and China, Chile and Venezuela, or Israel and Iran are powerfully clear as the 2025 Index documents categorically: freedom matters more than ever. Indeed, many countries are at a crossroads. Today, economic freedom is being attacked on all sides. The Chinese Communist Party (CCP) is working to constrain freedom not only within China’s own borders, but in nations around the world. Now is the time for correcting course.
“It is inspiring to see Argentina recording a notable score improvement, moving out of the bottom tier of economic freedom in the 2025 Index. Providing concrete momentum for the revitalization of Argentina’s economy, various fiscal and regulatory measures adopted as part of President Javier Milei’s decisive economic reform agenda have already generated notable progress.”
Launched in 1995, the Index evaluates countries in four broad policy areas that affect economic freedom: rule of law, government size, regulatory efficiency, and open markets. There are 12 specific categories, including property rights, judicial effectiveness, government integrity, tax burden, government spending, fiscal health, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom. Scores in these categories are averaged to create an overall economic freedom score.
