Cyprus is among the top 20 countries for economic freedoms but has ground to make up, according to the Economic Freedom Report issued by The Heritage Foundation.
According to the report, Cyprus was 18th, scoring 72.3 points.
Despite being placed among the world’s top 20 for economic freedom, the country’s rating worsened by 0.6 points.
Some 176 countries were assessed on 12 indicators, including the rule of law, governance efficiency, freedom of trade, business and investment, property rights, tax burden, and budgetary conditions.
The Republic’s economic freedom index recorded positive changes in seven of 12 indicators and negative changes in five.
Cyprus’ overall ranking was influenced by a significant improvement in its tax burden, labour, investment, and financial freedoms.
At the same time, property rights and the effectiveness of the judicial system deteriorated.
Cyprus came 12th among European nations, with the island’s overall score being higher than the global and regional averages.
Compared to other developing economies, the foundations of economic freedom in Cyprus are supported by a generally orderly judicial system, according to the report.
“Although public debt is modest compared to other European economies, rising government spending erodes respect for the principle of limited government and limits the overall economic freedom in Cyprus,” said the report.
The island’s overall score is influenced by areas such as justice, size of government, effectiveness of regulatory frameworks, and markets.
A drop is observed in five of the twelve indicators that comprise the index.
There was a decline in the property rights index with an overall score of 83, the judicial efficiency index at 89.7, and the government integrity index at 58.8.
A decline was also recorded in the monetary freedom index, with a total score of 81.5 and the trade freedom index, with a score of 78.6.
The Tax Burden Index rose with an overall score of 80.8, the Government Expenditure Index improved to 45.8, and the Fiscal Health Index increased to 73.3.
The work freedom index also rose to 66.5.
The indicators of business freedom, with a score of 74.9, investment freedom (75), and financial freedom (60) remained unchanged.
Singapore came first with a total score of 83.9.
It was followed by Switzerland (83.8), Ireland (82), Taiwan (80.7), and New Zealand (78.9).
The top five spots in Europe went to Sweden (83.8), Ireland (82), Estonia (78.6), Luxembourg (78.4), and the Netherlands (78).
