2017 Index of Economic Freedom

Singapore

overall score88.6
world rank2
Rule of Law

Property Rights97.1

Government Integrity87.9

Judicial Effectiveness91.5

Government Size

Government Spending90.1

Tax Burden90.5

Fiscal Health80.7

Regulatory Efficiency

Business Freedom95.1

Labor Freedom90.8

Monetary Freedom84.3

Open Markets

Trade Freedom90.0

Investment Freedom85.0

Financial Freedom80.0

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Quick Facts
  • Population:
    • 5.5 million
  • GDP (PPP):
    • $471.9 billion
    • 2.0% growth
    • 4.0% 5-year compound annual growth
    • $85,253 per capita
  • Unemployment:
    • 3.3%
  • Inflation (CPI):
    • -0.5%
  • FDI Inflow:
    • $65.3 billion
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Prudent macroeconomic policy and a stable political and legal environment have been the keys to Singapore’s continuing success in maintaining a strong and dynamic economy. Well-secured property rights promote entrepreneurship and productivity growth effectively. A strong tradition of minimum tolerance for corruption is institutionalized in an effective judicial framework, strongly sustaining the rule of law.

Singapore’s openness to global trade and investment and its transparent and efficient regulatory environment encourage vibrant commercial activity, and the private sector is a prime source of economic resilience and competitiveness. However, state ownership and involvement in key sectors remain substantial. A government statutory entity, the Central Provident Fund, administers public housing, health care, and various other programs.

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Background

Singapore is a democratic state that has been ruled by only one party, the People’s Action Party (PAP), since independence in 1965. In the September 2015 election, the PAP won 83 of the 89 parliamentary seats and 69.9 percent of the vote. Prime Minister Lee Hsien Loong has led the government since 2004. Certain civil liberties, such as freedom of assembly and freedom of speech, remain restricted, but the PAP has embraced economic liberalization and international trade. Singapore is one of the world’s most prosperous nations. Its economy is dominated by services, but the country is also a major manufacturer of electronics and chemicals.

Rule of LawView Methodology

Property Rights 97.1 Create a Graph using this measurement

Government Integrity 87.9 Create a Graph using this measurement

Judicial Effectiveness 91.5 Create a Graph using this measurement

Property rights are enforced. In 2015, the World Bank ranked Singapore first in enforcement of contracts and 24th in registration of property. Commercial courts function well, but the government’s overwhelmingly successful track record in court cases raises questions about judicial independence. Singapore is one of the world’s least corrupt countries, although the power of deeply entrenched political elites continues to raise concerns.

Government SizeView Methodology

The top individual income tax rate has been raised to 22 percent. The top corporate tax rate is 17 percent. The overall tax burden equals 13.4 percent of total domestic income. Government spending has amounted to 18.2 percent of total output (GDP) over the past three years, and budget surpluses have averaged 3.3 percent of GDP. Public debt is equivalent to almost a full year’s GDP.

Regulatory EfficiencyView Methodology

The overall entrepreneurial environment remains one of the world’s most transparent and efficient. The business start-up process is straightforward, with no minimum capital required. The labor market is vibrant and functions well, supported by flexible labor regulations. The government funds generous housing, transport, and health care subsidy programs and influences other prices through regulation and state-linked enterprises.

Open MarketsView Methodology

Trade is extremely important to Singapore’s economy; the value of exports and imports taken together equals 326 percent of GDP. The average applied tariff rate is 0.0 percent, and most sectors of the economy are open to foreign investment. The efficient and well-developed financial sector is highly competitive. The government continues its ownership in the sector but has steadily been opening the domestic market to foreign banks.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Hong Kong89.81.2
2Singapore88.60.8
3New Zealand83.72.1
4Australia810.7
5Taiwan76.51.8
6South Korea74.32.6
7Malaysia 73.82.3
8Macau70.70.6
9Brunei Darussalam69.82.5
10Japan69.6-3.5
11Kazakhstan695.4
12Vanuatu67.46.6
13Thailand 66.22.3
14Philippines65.62.5
15Azerbaijan63.63.4
16Fiji63.44.6
17Tonga633.4
18Indonesia61.92.5
19Kyrgyz Republic 61.11.5
20Cambodia59.51.6
21Bhutan58.4-1.1
22Samoa58.4-5.1
23Tajikistan58.26.9
24China57.45.4
25Sri Lanka57.4-2.5
26Nepal55.14.2
27Solomon Islands558.0
28Bangladesh 551.7
29Mongolia54.8-4.6
30Micronesia54.12.3
31Laos544.2
32Pakistan 52.8-3.1
33India52.6-3.6
34Burma52.53.8
35Vietnam52.4-1.6
36Uzbekistan52.36.3
37Papua New Guinea50.9-2.3
38Kiribati50.94.7
39Maldives50.3-3.6
40Afghanistan48.9N/A
41Turkmenistan47.45.5
42Timor-Leste46.30.5
43North Korea4.92.6
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