Latvia ranks 20th in the annual Economic Freedom Index, released by the Heritage Foundation and Wall Street Journal. Compared to last year, Latvia has climbed 16 places. The authors of the study calculated that Latvian economic freedom level this year corresponds to 74.8 points, which is 4.4 percentage points more than last year. The improvements are in five of the 12 economic freedom indicators: property rights, government integrity, business freedom, labor freedom and monetary freedom. Latvia has kept its position unchanged on judicial effectiveness, fiscal health and financial freedom. Latvia is ranked among the "mostly free" countries. Twenty-nine countries are included in this category, including the United States (17th place), Sweden (19th), South Korea (23rd), Germany (26th) and Botswana (34.vieta).
According to the Economic Freedom Index report, “The increasing dynamism of Latvia’s economy has been facilitated by openness to global trade and investment. Supported by efficient business regulations that promote entrepreneurial activity, the overall commercial environment has become conducive to business creation and risk-taking.”
The Washington, DC-based Heritage Foundation has been producing the Economic Freedom Index since 1995. The report analyzes 50 different indicators. The underlying premise of the study is that the higher economic freedom, the higher the standard of living and per capita income. The index is calculated on the basis of criteria in four categories: the rule of law, government scale, efficiency of regulation and market openness. The Index covers 12 freedoms – from property rights to entrepreneurship – in 186 countries.