Singapore’s economy has been ranked the freest in the world this year in the Heritage Foundation’s 2021 Index of Economic Freedom. Singapore’s economic freedom score is 89.7, making its economy the freest in the 2021 Index. The country is ranked first among 40 countries in the Asia–Pacific region, and its overall score is well above the regional and world averages. It is the only country in the world that is considered economically free in every Index category.
The foundations of Singapore’s economic resilience and competitiveness include strong protection of property rights and effective enforcement of anti-corruption laws. Property rights are recognized and enforced effectively. Judicial processes are procedurally competent, fair, and reliable, and the judiciary is regarded as independent. Singapore is ranked 12th in the World Justice Project’s 2020 Rule of Law Index and is considered one of the world’s least corrupt countries. The regulatory environment is flexible and transparent.
Singapore has an efficient government that provides good public services with low tax rates – the top individual income tax rate is 22%, and the top corporate tax rate is 17%. Government spending has amounted to 14% of total output (GDP) over the past three years, and budget surpluses have averaged 4.3% of GDP.
Singapore has 25 preferential trade agreements in force. The trade-weighted average tariff rate is 0%, and 182 nontariff measures are in effect. Well-institutionalized openness to global investment encourages vibrant commercial activity. The government continues its ownership in the financial sector but has steadily been opening the domestic market to foreign banks.
(Source: The Heritage Foundation)