Malaysia scored 7.57 out of 10 in the Economic Freedom of the World: 2026 Annual Report, the highest mark since the index began in 1970, according to Free Malaysia Today. The Center for Market Education (CME), which issued the Malaysian summary, said the result edges past the 7.55 recorded a year earlier.
The gain was too small to hold the country’s position. Malaysia fell two places to 35th out of 165 countries as other economies improved faster.
The index is published by Canada’s Fraser Institute and weighs five areas: size of government, legal system and property rights, sound money, freedom to trade internationally, and regulation. It draws on 2024 data, the most recent available, The Malaysian Reserve noted.
CME said the country is far more economically free than at the start of the century. The score fell from 6.99 in 1995 to 6.12 in 2002 after the Asian financial crisis, as capital controls and policy shocks took hold. Malaysia placed 97th in 2009 and has climbed steadily since.
Within Asean, Malaysia remains the second-freest economy behind Singapore, which ranks third in the world. Thailand sits 57th, Brunei and the Philippines are joint 61st, and Indonesia is 72nd. The national score sits well above the regional average of 6.99.
The area breakdown shows where the strengths and the gaps sit. Sound money is the strongest at 9.40, good for 18th globally, and regulation scores 7.39 for 24th. Legal system and property rights is the weakest at 5.94, ranking 54th. Malaysia places 53rd for size of government and 63rd for freedom to trade internationally.
The detail is harsher on state ownership. The country ranks 135th of 162 jurisdictions assessed for state ownership of assets, and 130th for government ownership of banks.
Carmelo Ferlito, CME’s chief executive officer, said the record score is good news but no reason for complacency. “Malaysia’s monetary stability and relatively flexible labour market are real assets,” he said. “But the state’s footprint in the economy, through government-linked companies and state-owned banks, remains among the heaviest in the world.”
Ferlito said Malaysia must reduce state ownership, keep the civil service rules-based and impartial, simplify its tariff structure and open its markets to competition if it wants to join the top 20. Trade freedom has held at about 7.90 since 2017, weighed down by uneven tariff rates across products and restrictions on capital movements.
The report also identified legal disparities between men and women, and weaker impartiality in public administration, as constraints on the country’s performance. Even so, the 7.57 keeps Malaysia in the top quarter of the 165 countries scored, and well clear of its 2009 low.
