Sri Lanka’s position in the Heritage Foundation’s annual Index of Economic Freedom has further declined, according to Professor Wasantha Athukorala, Director of the Postgraduate Studies Department of Humanities and Social Sciences at the University of Peradeniya. Professor Athukorala explained that Sri Lanka’s ranking, based on an assessment of 184 countries worldwide, has seen a steady decline over recent years.
In 2016, Sri Lanka was ranked 95th globally in economic freedom. By 2020, it had fallen to 117th, then to 136th by 2023, and most recently, to 149th in 2024. This index evaluates countries annually using criteria such as rule of law, government effectiveness, regulatory efficiency, and market openness, as well as 12 additional sub-indexes under these main categories.
Within the Asia-Pacific region, Sri Lanka now ranks 34th out of 39 countries, indicating a low level of economic freedom compared to regional peers like India, Nepal, and Pakistan. The report categorizes Sri Lanka as a nation where economic freedom is not only limited but also actively constrained.
Professor Athukorala stressed that to revitalize Sri Lanka’s economy through both domestic and foreign investment, it is crucial for the nation to improve its standing in these indicators of economic freedom, keeping pace with other countries in the region.
