Nepal has dropped one spot to 90th among 165 countries in the Economic Freedom of the World: 2026 Annual Report, even though its overall economic freedom score has slightly increased.
The report, released by the Prosperity Foundation in partnership with Canada’s Fraser Institute, shows Nepal’s score rising from 6.58 to 6.59.
The ranking evaluates countries based on the most recent data from 2024, assessing their economic freedom levels.
Nepal’s Performance on Key Indicators
Nepal’s results were mixed across the five main areas of the index.
- It fell from 49th to 51st in government size, with a score decrease from 7.29 to 7.25.
- The country dropped from 91st to 96th in legal system and property rights, with a score decline from 4.92 to 4.82.
- Nepal slipped from 96th to 101st in sound money, though its score improved from 7.37 to 7.57.
- The most notable improvement was in international trade, where Nepal rose from 126th to 117th, increasing its score from 6.21 to 6.39.
- However, it fell from 37th to 50th in regulation, with a score drop from 7.12 to 6.90.
Overall, Nepal improved in seven sub-indicators, dropped in six, and maintained the same scores in 11 of the 24 sub-indicators used in the report.
Nepal’s Score Recovers Post-Pandemic
Despite the overall decline, Nepal’s latest score shows recovery compared to the drop during the COVID-19 pandemic. Economic freedom fell from 6.52 in 2019 to 6.31 in 2020, but rebounded to 6.59 in the latest report.
The report evaluates economic freedom based on government size, legal institutions, property rights, sound money, international trade, and regulation.
Hong Kong Maintains Top Global Ranking
Hong Kong continues to hold the top position in the rankings, followed by Switzerland, Singapore, New Zealand, and the United States. Major Asian countries ranked lower, with Japan at 13th, India at 88th, and China at 110th. Russia is at 143rd, while Venezuela is last.
The report also highlights a significant gap in living standards between countries with high and low economic freedom. In 2024, GDP per capita was $65,596 for the top quartile, compared to $9,552 for the bottom quartile.
While Nepal’s overall score is improving, challenges in property rights, regulation, and government size have contributed to its decline in global rankings.