The US is reversing a 5-year decline in economic freedom with the largest increase since 2001
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The US has reversed a five-year decline in the Heritage Foundation’s Index of Economic Freedom and its largest annual increase in the index in more than two decades, FOX Business can exclusively reveal.
American economic freedom the score increased by 2.6 points from the previous year to 72.8, which ranked 22nd among more than 176 countries that had finished the score in the list. The 2.6-point increase was the largest annual increase since 2001 and the second largest the US has experienced in the index’s 32-year history.
The Values Index of Economic Freedom assesses 12 economic freedoms that fall into four categories including the rule of law, size of government, regulatory effectiveness and open markets – each with three categories.
“Improvements in US scores on financial freedom, government spending, financial health, and investment freedom have surpassed the lowest scores on trade freedom, reflecting the positive impact of major regulatory and tax changes economic growthinvestment, and business confidence,” Heritage’s Anthony Kim, Jay Kingham Research Fellow in International Economic Affairs, editor of the Index of Economic Freedom and director of global engagement at the Margaret Thatcher Center for Freedom, told FOX Business.
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Pedestrians walk past an American flag displayed outside the New York Stock Exchange (NYSE) in New York on September 12, 2016. (Michael Nagle/Bloomberg via Getty Images)
Kim explained that the progress was “not an accident” and reflected the Trump administration’s “cut back” efforts. government jobsreducing spending, and prioritizing the growth of the private sector through work, reducing strict regulations and tax reforms.”
While the US’s score of 72.8 came in 22nd in the world rankings, it ranked 3rd in the Americas, trailing only behind. Canada (75.6) and Chile (74.3), respectively. Mexico scored 59.8 and ranked 92nd in the world, while it was in 19th place among 32 countries in the Americas region.
Of the law category, the US ranked high in property rights, legal effectiveness and government integrity all of which scored well above the global average.
The size of government was relatively weak in the US, with a tax burden rating of 75.3 compared to a global average of 78.4. Government spending reached 57.9 on the global average of 66.3, while the financial situation was very weak – as the US’s 18.5 points were well below the global average of 65.9 due to high levels of public debt and large. budget deficit.
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The US rating has been boosted by legislation but reduced by poor financial health. (J. David Ake/Getty Images)
Features of control effectiveness The report’s assessment of freedom of business, labor and finance were all above the index’s global average.
About open marketsthe US scored 67.6 on trade freedom, which was below the global average of 70.2. However, investment freedom and financial freedom each scored 80 in the US, above the global average of 53.4 and 48.1, respectively.
Kim noted that “the impact of restrictive tariffs on the global economy has been more muted than feared, due to increased investment in critical sectors such as energy and AI (among many others),” adding that the lack of tariff retaliation by countries other than China, Canada and the EU reduces the potential impact of a trade war.
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Taiwan is ranked fifth in the world in terms of economic freedom. (Hwa Cheng/Bloomberg via Getty Images)
The countries with the highest scores on Heritage’s Index of Economic Freedom were Singapore (84.4), Switzerland (83.7%), Ireland (83.3), Australia (80.1) and Taiwan (79.8).
Low-scoring countries were among the most depressed in the world, with North Korea (3.1) is ranked last. Cuba (25.2), Venezuela (27.3), Sudan (32.5) and Zimbabwe (35.2) rounded out the top five countries in the analysis of Gems.
Russia (50.3), China (48.3) and Iran (41.8) were also among the lowest scoring countries on the list due to their stressful political and economic systems.
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The President of Argentina, Javier Milei, has led economic reforms that have raised the country’s standard. (Kevin Dietsch/Getty Images)
Argentina’s economic freedom rating saw the largest increase over the previous year among all countries in the Values index, increasing by 3.2 points compared to the previous year.
“Victory in the October 2025 mid-term elections provided a President with a vision for reform Javier Miley with concrete support and great momentum to continue transforming Argentina’s economy,” said Kim.
Kim noted that several other countries, including Oman, the Philippines, Morocco and Paraguay, “recorded improvement in scores over the past two years despite challenging economic conditions.”
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He added that Paraguayan President Santiago Peña has been “clearly promoting economic freedom, fighting corruption, and building relationships with democratic nations.”
