In the latest release of the “Economic Freedom of the World Index” by the Canadian Fraser Institute, the Czech Republic has secured the seventeenth position out of 165 countries surveyed, signaling a positive trend in the country’s economic landscape. What makes this achievement even more remarkable is that the Czech Republic not only improved its absolute ranking in economic freedom but also advanced in relative terms, rising to the 22nd spot compared to the previous year’s revised ranking. This encouraging report was unveiled in a press release by the Liberal Institute, a prominent think tank.

The “Economic Freedom of the World Index,” in existence since 1996, utilized data from 2021 for this year’s report. The delay in publication is attributed to the extensive data collection process spanning 165 countries. This comprehensive index assesses countries based on five key indicators: the size of the government sector, adherence to the rule of law, international trade, the overall regulatory framework, and the monetary and inflationary environment.

Martin Pánek, Director of the Liberal Institute, underscored the positive trend in the Czech Republic, stating, “The main takeaway should be that economic freedom has increased in the Czech Republic. After a five-year period of diminishing economic freedom, we have successfully reversed this trend.” This turnaround is indicative of the country’s commitment to fostering a business-friendly environment and reducing unnecessary regulatory burdens.

The Czech Republic showcased improvement in four out of the five index indicators, with a slight setback in the inflationary environment. In 2021, the country experienced an increase in inflation, a trend that had started towards the end of the previous year. Despite this, the overall progress in economic freedom is a testament to the resilience and adaptability of the Czech economy.

In the global rankings, Finland and Sweden share the seventeenth position with the Czech Republic, while Germany ranks 23rd, Austria 28th, Slovakia 41st, Hungary 49th, and Poland 59th. The Liberal Institute highlights that the Czech Republic now boasts the most liberalized economy in Central Europe, which is a significant achievement for the nation.

In a historic development, Singapore has claimed the title of the world’s most economically free country, unseating Hong Kong, which had held this distinction consistently since 1960. This shift is attributed to increasing repression by the Chinese central government, which has led to a decline in economic freedom in Hong Kong—a trend that is expected to persist.

Conversely, the ten countries with the lowest economic freedom rankings are Congo, Algeria, Argentina, Libya, Iran, Sudan, Syria, Yemen, Zimbabwe, and Venezuela. Notably, North Korea and Cuba are excluded from the ranking due to a lack of available data. These rankings serve as a crucial benchmark for assessing the economic policies and regulatory environments of nations worldwide, providing valuable insights into their economic trajectories.

Article by Prague Forum