Czech Republic ranks 22nd in Global Economic Freedom Index, slips four places

The Czech Republic has been ranked the 22nd most economically free country in the world out of 165 nations, according to the Economic Freedom of the World Index released by the Canadian Fraser Institute. The report, shared by the Institute of Liberal Studies, indicates a decline for the country, which dropped four spots compared to last year. The overall level of economic freedom in the Czech Republic has also diminished in absolute terms, reflecting a broader global trend.

The index, published annually since 1996, is based on data from 2022 and evaluates countries across five key areas: government size, rule of law, international trade, regulation, and monetary and inflationary environments. This year, Hong Kong retained its position as the world’s most economically free country, while Venezuela ranked last.

According to the report, the Czech Republic saw slight improvements in four of the five assessed categories but suffered significant setbacks in its inflation environment. Inflation surged in 2022, with the country recording an annual average of 15.7%, contributing to its lower ranking.

“Since 2016, economic freedom in the Czech Republic has been steadily declining, with the exception of 2021, the second year of the pandemic, when there was a slight increase in freedom compared to the first pandemic year. This trend is concerning,” said Martin Pánek, director of the Institute of Liberal Studies, in a statement about the latest results.

Despite the slip, the Czech Republic remains one of the more economically free countries in Central Europe. Germany leads the region, ranking 16th globally, while Austria follows closely behind the Czech Republic in 23rd place. Other regional neighbors include Slovakia (45th), Hungary (55th), and Poland (70th).

The Economic Freedom of the World Index underscores the link between economic freedom and prosperity. According to the Institute of Liberal Studies, countries with higher levels of economic freedom enjoy greater prosperity, higher life expectancy, and broader civil liberties. In nations ranked in the top quarter of the index, only 1% of the population lives in extreme poverty (on less than $1.90 per day), compared to 30% in countries in the lowest quarter. Life expectancy also differs dramatically, with a 15-year gap between the most and least economically free countries.

“Where people are empowered to make their own choices and pursue their own happiness, they tend to live longer, healthier, and more prosperous lives,” Pánek added.

Source: CTK