--- title: US Ranks Fifth for Economic Freedom as Report Authors Project a Decline Under Trump in 2025 description: The 2026 Economic Freedom of the World ranking puts Hong Kong first and the US fifth, and its authors project a US decline under Trump in 2025. author: Darie Nani (Editor-in-Chief) date: 2026-10-13T08:50:52.863Z updated: 2026-10-13T08:50:52.872Z canonical: https://www.sovereignmagazine.com/article/economic-freedom-ranking-2026-fraser-institute image: https://cdn.nanimediahouse.com/pexels-a-lively-street-market-in-hong-kong-bustling-with-people-sho-2926723.jpg categories: Economy content_type: News region: Global publication: Sovereign Magazine schema_type: Article --- The United States ranked fifth in the world for economic freedom in 2024, and the authors of the Fraser Institute's annual Economic Freedom of the World report project that US economic freedom fell in 2025, the first year of President Trump's second term. The Fraser Institute, a Canadian think tank, published the 2026 edition on Oct. 6. It ranks 165 jurisdictions on 2024 data, the latest year for which figures can be compiled across all of them. The authors also analyzed more recent US data, and they expect the American decline to show up when 2025 figures are added in next year's edition. The institute's release did not say what drove the projected decline. InvestmentNews, in its own analysis of the report, called it "a direct consequence of the tariff regime that dominated policy in 2025 and 2026." Freedom to trade internationally is one of the five areas the index scores. Worldwide, economic freedom is recovering from the pandemic, but it is still below its pre-pandemic level and the recovery has been uneven, the Fraser Institute said. "Global economic freedom fell during the pandemic as policymakers imposed new regulations, raised barriers to trade, increased government spending and taxes, and then printed money to pay for spending," said Matthew Mitchell, a senior fellow at the Fraser Institute and a coauthor of the report. ## Hong Kong Kept First Place in the Economic Freedom Ranking, and the UK Ranked 10th Hong Kong stayed at the top of the list of the most economically free countries and territories, even though its score has fallen every year since 2018. Switzerland ranked second, Singapore third, New Zealand fourth and the United States fifth. Among other major economies, the United Kingdom ranked 10th, Japan 13th, Germany 19th, France 39th, Italy 47th, South Korea 53rd, India 88th, China 110th and Russia 143rd. South Africa ranked 87th with an overall score of 6.63 out of 10, down from 83rd, Polity reported. The 10 lowest-ranked countries were Congo, Egypt, Malawi, Algeria, Iran, Myanmar, Libya, Sudan, Zimbabwe and Venezuela. ## Canada Fell From Ninth to 18th, With Its Steepest Decline in Trade Openness Canada ranked 18th of 165, down from ninth a year earlier. Germany, at 19th, is now one place behind it. "Canadians should be worried because when people are less economically free, their standards of living tend to suffer," Mitchell said. According to Wealth Professional's analysis of the report, Canada scored lower in three of the five areas: the size of government, regulation and freedom to trade internationally. Its steepest decline was in [trade openness](https://www.sovereignmagazine.com/article/usmca-tariff-modelling-us-manufacturing-output). On size of government alone, Canada ranked 101st of 165. Its sound money score improved as inflation eased during 2024, and its legal system score was essentially unchanged. > "Where people are free to pursue their own opportunities and make their own economic choices, they lead more prosperous, happier and healthier lives" > — Matthew Mitchell, Senior Fellow, Fraser Institute ## Per-Person GDP in the Freest Quarter of Countries Was About 6.9 Times That of the Least Free In 2024, per-person GDP in the quarter of countries with the most economic freedom was $65,596. In the least-free quarter it was $9,552. Extreme poverty, defined as living on less than $4.10 a day, affected 2% of people in the most economically free quarter and 41% in the least free. Life expectancy was 81 years in the freest countries and 67 years in the least free. For investors, the report's literature review of more than 720 peer-reviewed papers published over 26 years found that countries scoring well on the five areas "consistently attract capital, produce faster growth, and generate stronger long-run equity performance," InvestmentNews reported. ## FAQ **Q: How is economic freedom measured?** The Fraser Institute scores jurisdictions in five areas: the size of government, legal systems and property rights, sound money, freedom to trade internationally, and the burden of regulation. It defines economic freedom as the degree to which individuals are allowed to make their own decisions about what to buy, where to work and whether to start a business. **Q: Where do emerging markets rank on economic freedom?** In the 2026 report, Indonesia ranked 72nd, Mexico 77th and Brazil 85th of 165 jurisdictions. **Q: Who publishes the Economic Freedom of the World report?** The Fraser Institute, an independent Canadian public policy research organization with offices in Vancouver, Calgary, Toronto and Montreal, publishes it. The institute says it does not accept grants from governments or contracts for research. Partner groups publish it in their own countries, such as the Free Market Foundation in South Africa. **Q: What is holding South Africa back on economic freedom?** According to the Free Market Foundation, general government spending exceeds one-third of GDP and consistently exceeds tax revenue, and regulation is heavy, particularly of the labor market. Of the five areas, only sound money has avoided dropping below its level of 25 years ago.