ECONOMY | Staff Reporter, Hong Kong

Hong Kong retains crown as world's freest economy

The SAR had stellar scores in trade and monetary freedom.

Hong Kong beat out Singapore to continue ranking as the freest economy in the world, according to the Heritage Foundation’s 2019 index of economic freedom, with a headline score of 90.2 compared to the Lion City’s 89.4.

The SAR's overall score remains unchanged in 2019 although it booked slight increases in trade freedom, monetary freedom and government integrity which more than offset a decline in judicial effectiveness.

"An exceptionally competitive financial and business hub, Hong Kong remains one of the world’s most resilient economies," the firm said in a statement. "Regulatory efficiency and openness to global commerce undergird a vibrant entrepreneurial climate." 

Also read: Trade jitters and bearish equities weigh heavily on Hong Kong 2019 GDP

In terms of rule of law, Hong Kong protects property rights and enforces contracts effectively. However, judicial effectiveness dipped slightly as Beijing still reserves the right to make final interpretation to the Basic Law to effectively limit the power of Hong Kong's Court of Final Appeal. 

Also read: Close Chinese ties are both boon and bane for Hong Kong banks

Hong Kong also has a simple and efficient tax system with a standard income tax rate of 15% and a top corporate tax rate of 16.5%. The overall tax burden is around 14% of total domestic income.

Over the past three years, government spending has amounted to 17.9%  of the country’s output (GDP), and budget surpluses have averaged 3.4 percent of GDP. Public debt is equivalent to 0.1% of GDP.

Rounding out the top five freest economies in the the world are New Zealand, Switzerland, Australia and Ireland. 

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