Sweden’s economic freedom score is 72.7, making its economy the 23rd freest in the 2015 Index. Its score has decreased by 0.4 point since last year, with improvements in four of the 10 economic freedoms outweighed by deteriorations in freedom from corruption, business freedom, and the management of government spending. Sweden is ranked 12th out of 43 countries in the Europe region, and its overall score is above the world and regional averages.
Despite its well-established welfare state and large government budget, Sweden has made marginal changes to improve its economic freedom and competitiveness. Over the past five years, economic freedom in Sweden has advanced by 0.8 point with gains in five of the 10 economic freedoms, including fiscal freedom, the management of government spending, monetary freedom, trade freedom, and investment freedom.
Sweden’s high-performing economy has built its success on openness to global trade and investment. Reforms over the past two decades reduced the role of government and introduced market mechanisms that set the foundations for today’s competitive economy. Sweden’s business freedom score is one of the highest in the world. Fiscal responsibility remains central to the new government’s policy proposals, but plans to reverse some of the previous government’s tax cuts in order to fund higher spending could hurt growth.