Chile has climbed to 20th place in the 2026 Economic Freedom of the World report, published by Canada's Fraser Institute, making it the highest-ranked economy in Latin America. The country moved up six spots from the previous ranking, surpassing Costa Rica for the first time. The report, which uses 2024 data, evaluates economic freedom based on five key areas: size of government, legal system and property rights, sound money, freedom to trade internationally, and regulation.
The improvement in Chile's ranking was primarily driven by monetary stability, with its score rising from 8.58 to 9.18 points. Economist Michele Labbé attributed this to a significant drop in inflation, from 7.3% in 2023 to 3.9% in 2024. "Price stability makes it easier for businesses to make investment decisions," she explained. Chile also saw gains in the size of government, legal system, and property rights categories, which economist Felipe Cerda linked to reduced uncertainty following the conclusion of constitutional reform processes.
While Chile's economic conditions improved compared to 2023, they remain below 2018 levels. The report noted that global economic freedom began recovering in 2024 but had not returned to pre-pandemic levels. Latin America and the Caribbean remained the region furthest behind in this recovery. Other Latin American countries ranked considerably lower, with Panama at 34th, the Dominican Republic at 40th, and Venezuela at the bottom of the global ranking.
Costa Rica, which previously held the top spot in Latin America, fell to 28th place. Cerda cited declines in international trade and legal system and property rights as contributing factors. Labbé noted that Costa Rica experienced a 10% increase in tariffs, making it less competitive. The report concluded that Latin American economies still face serious problems with property rights and public policies, including tariffs, trade restrictions, and rigid regulations.