Nepal edges up in Global Economic Freedom score

Nepal has slipped one position to 90th among 165 countries and jurisdictions in the Economic Freedom of the World: 2026 Annual Report, despite a slight improvement in its overall economic freedom score.

The report, released by Samriddhi Foundation in collaboration with Canada’s Fraser Institute, awarded Nepal a score of 6.59 out of 10, up from 6.58 in the previous year’s report. 

The index assesses economic freedom across five key areas: size of government, legal system and property rights, sound money, freedom to trade internationally, and regulation.

Nepal’s performance across key indicators

Nepal’s performance varied across the five categories. Its ranking in international trade improved significantly, while its positions in regulation, legal systems and property rights weakened.

Size of government: Nepal ranked 51st with a score of 7.25, down from 49th with 7.29.

Legal system and property rights: The country fell to 96th with a score of 4.82, compared with 91st and 4.92 previously.

Sound money: Nepal ranked 101st with a score of 7.57, improving its score from 7.37 but falling from 96th in the ranking.

Freedom to trade internationally: Nepal improved to 117th with a score of 6.39, up from 126th with 6.21.

Regulation: The country dropped to 50th with a score of 6.90, compared with 37th and 7.12 in the previous report.

Of the 24 sub-indicators assessed under these five categories, Nepal improved in seven, declined in six and maintained its previous position in 11.

Despite its one-place decline in the overall ranking, Nepal’s score has recovered from the decline recorded during the COVID-19 pandemic. Its score fell from 6.52 in 2019, when it ranked 98th, to 6.31 in 2020, when it ranked 100th.

Hong Kong retained the top position in the global index, followed by Switzerland, Singapore, New Zealand and the United States. Ireland, Denmark, Australia and Mauritius also featured in the top 10, alongside Finland, the Netherlands and the United Kingdom, which shared the final position in the group.

India ranked 88th with a score of 6.62, placing it two positions ahead of Nepal. China ranked 110th, while Japan secured 13th place. Germany ranked 19th, France 39th and Russia 143rd.

Venezuela ranked last, followed by Zimbabwe, Sudan, Libya and Myanmar among the lowest-ranked jurisdictions.

Economic freedom linked to prosperity

According to the report, research published in leading peer-reviewed academic journals associates greater economic freedom with higher prosperity, stronger political and civil liberties, and longer life expectancy.

Countries in the top quarter of the economic freedom index (such as the U.K., Japan, and Ireland) recorded an average per-capita income of $65,596 in 2024, compared with 9,552 in countries in the bottom quartile (such as Venezuela, Iran, and Sudan). Average life expectancy was 80.7 years in the top group, compared with 67.1 years in the bottom group.

The annual Economic Freedom of the World report evaluates how national policies and institutions support economic freedom across 165 jurisdictions, providing a comparative assessment of the conditions that enable individuals and businesses to make economic choices.

Samriddhi Foundation has been publishing the report in Nepal for the 19th consecutive year.