Malaysia scored 7.57 out of 10 in the Economic Freedom of the World: 2026 Annual Report, its highest score since the index began in 1970, according to the Center for Market Education (CME).
The think tank said Malaysia had previously scored 7.55. However, the country fell two places to 35th out of 165 countries as other economies improved at a faster pace.
In a statement today, CME said Malaysia was far more economically free than it had been at the start of the century.
Its score fell from 6.99 in 1995 to 6.12 in 2002 following the Asian financial crisis, as capital controls and policy shocks took hold.
Malaysia ranked 97th out of 165 countries in 2009 but had climbed steadily since then, CME said.
The think tank added that Malaysia remained Asean’s second-freest economy, behind Singapore, which ranked third globally.
Other Asean economies ranked lower, with Thailand at 57th, Brunei and the Philippines tied at 61st, and Indonesia at 72nd.
Record score, but reform remains necessary
Malaysia’s score was also well above the regional average of 6.99. However, CME chief executive Carmelo Ferlito said the record score was good news but should not lead to complacency.
Ferlito said other countries were implementing reforms more quickly, explaining Malaysia’s two-place drop in the rankings.
‘Malaysia’s monetary stability and relatively flexible labour market are real assets.
‘But the state’s footprint in the economy, through government-linked companies and state-owned banks, remains among the heaviest in the world,’ he said.
CME outlines path to top 20
Ferlito said Malaysia would need to reduce state ownership, ensure the civil service remained rules-based and impartial, simplify its tariff structure, and open its markets to competition if it wanted to break into the top 20.
