Hong Kong is the world's freest economy amidst score decline

Its economic freedom rating has fallen 0.68 points since 2009, mostly after 2018.

Hong Kong retained its position as the world’s freest economy despite a 0.68-point decline in its economic freedom score since 2009.

The city ranked first amongst 165 jurisdictions with a score of 8.53 out of 10, ahead of Switzerland at 8.45 and Singapore at 8.43, according to the Fraser Institute’s Economic Freedom of the World 2026 Annual Report.

However, its score fell from 9.21 in 2009, with most of the decline occurring after 2018.

“To put this in perspective, a difference of 0.68 points is about equal to the difference in economic freedom between the United States and Armenia,” the report said.

The institute estimated that the decline in economic freedom since 2009 had left Hong Kong's real per-capita income approximately US$5,100 to US$6,400 lower than it otherwise would have been.

The deterioration was driven by declines in three assessment areas — ‘Size of Government’, which fell 1.85 points; ‘Legal System and Property Rights’, down 0.98 points; and ‘Regulation', down 0.47 points.

Fraser Institute attributed the decreases in Regulation and Legal System and Property Rights to the national security law introduced in 2020, arguing that it had undermined the city's autonomy under the ‘one country, two systems’ framework.

Despite the deterioration, the city ranked first globally in ‘Freedom to Trade Internationally’, scoring 9.66, and second in ‘Regulation’, with 8.61.

It also placed eighth in ‘Sound Money’ with 9.50, 24th in ‘Legal System and Property Rights' with 7.56, and 48th in ‘Size of Government’ with 7.30.

In response to the report, the Hong Kong government said the rankings reaffirmed the city's strengths as a free-market economy.

A spokesman said the city would maintain its free port status, zero-tariff policy and low-tax regime amidst increasing global economic uncertainty and trade protectionism.

The government also cited an increase in business activity, with the number of companies in Hong Kong whose parent firms are based overseas or in the Mainland exceeding 11,000 in 2025, up 11% from 2024 and a record high.

The report assesses economic freedom through 46 components and subcomponents across five areas, including government size, legal protections, monetary stability, international trade, and regulation.

The rankings were based on 2024 data.