A new global report ranks the country 14th worldwide, highlighting its monetary stability and open trade. What does this mean for those who live, invest, or visit here?
Costa Rica is world-renowned for its lush biodiversity, commitment to sustainability, and “Pura Vida” lifestyle. Now, a recent and prestigious analysis adds another accolade to its reputation: that of a bastion of economic stability and opportunity.
According to the Economic Freedom of the World: 2025 Report, published by Canada’s Fraser Institute, Costa Rica has achieved the #1 ranking in all of Latin America and an impressive #14 globally among 165 countries assessed.
This ranking is not just a number on a list; it is a key indicator of the confidence, predictability, and opportunity that a country offers.
What Exactly is “Economic Freedom”?
In simple terms, economic freedom measures the ability of individuals and businesses to make their own economic decisions. The Fraser Institute’s index evaluates five key areas to determine a country’s score:
- Size of Government: The impact of public spending and taxes.
- Legal System and Property Rights: Confidence that contracts will be respected and private property is safe from confiscation.
- Sound Money: The stability of the currency and low inflation, which protect savings.
- Freedom to Trade Internationally: The ease of importing and exporting goods and services without excessive tariffs and barriers.
- Regulation: The efficiency of regulations in credit, labor, and business markets.
Why Does Costa Rica Win?
Costa Rica’s rise to the top of the region is driven by particularly high scores in crucial areas. The report highlights the country’s strength in “Sound Money,” reflecting successful inflation management and a stable currency that citizens can trust.
Furthermore, the country scores high on “Freedom to Trade Internationally.” This is a direct result of its policy of openness, its active network of free trade agreements, and relatively low tariffs, which integrate the country with the global economy.
Finally, the nation’s strong democratic tradition translates into a legal system and property rights framework that, while facing challenges, is considered a pillar of legal certainty for investment.
Regional and Global Context
Costa Rica’s achievement is even more notable when compared to its neighbors. The country leads the region, surpassing other traditionally strong economies like Chile (ranked 26th) and Panama (ranked 27th).
Globally, the 14th-place ranking puts Costa Rica in the top quartile of the freest economies, a group that includes powerhouses like Switzerland, Singapore, and the United States. This position contrasts sharply with the reality of other nations in the region, such as Argentina (158) and Venezuela, which ranks last (165).
Why Should This Ranking Matter to You?
This report has direct implications for everyone in the “People of Costa Rica” community:
- For Investors and Digital Nomads: A high ranking in economic freedom is synonymous with predictability and security. It means the rules of the game are clear, capital is protected, and the environment is favorable for doing business.
- For Residents (Locals and Expats): Fraser Institute studies consistently show that countries with greater economic freedom tend to have higher per capita incomes, longer life expectancies, lower levels of corruption, and higher reported happiness levels.
- For Tourists: The economic stability reflected in this index is the foundation that supports the “Pura Vida” experience. It translates into reliable infrastructure, quality services, and a peaceful social environment that allows the tourism industry to flourish.
Looking Ahead
While the report is excellent news, it also highlights ongoing challenges, such as the need to streamline state bureaucracy and improve competitiveness in production costs.
However, this recognition solidifies Costa Rica’s image not only as a natural paradise but as a haven of stability and freedom in the Americas. It is a clear sign that the country is moving in the right direction, balancing its iconic green brand with a solid economic framework.
Sources of Information
For those who wish to delve deeper into the data, the original reports are publicly available:
- Fraser Institute: Publishes the “Economic Freedom of the World” report.
- PROCOMER (Costa Rica’s Foreign Trade Promoter): Often analyzes and publishes summaries on how these international indices impact the country’s investment climate.
