Closed economy Why is Iran at the bottom of the economic freedom table? Hamed Wahidi / Author of the publication Economic freedom in simple language means to what extent people can decide about their work, income, savings, investment and economic activity. Economic freedom is not only limited to low or high taxes, but is also related to a set of institutional and political conditions that shape people's economic lives. To examine this issue, the Fraser Institute's 2026 report titled Global Economic Freedom is considered one of the most important sources. According to this report, Hong Kong was ranked first in economic freedom in 2024, followed by Switzerland, Singapore, New Zealand and the United States. On the other hand, Iran is among the ten countries with the lowest score of economic freedom. The Global Economic Freedom Index examines economic freedom in five main areas. The first area is the size of government. In this part, factors such as government spending, taxes and the level of the government's financial involvement in the economy are examined. The basic idea is that when the government captures a large share of economic resources through taxation and public spending, the scope of choice of individuals and companies may be limited. However, the smallness of government in itself is not a sign of positive economic performance. A government that is unable to provide security, enforce the law and provide public infrastructure may harm economic activity. One of the most important obstacles to economic activity in Iran is the difficulty of establishing proper communication with the global economy. International sanctions, banking restrictions, money transfer problems and difficulty in accessing certain technologies and equipment increase the cost of foreign trade. For example, an Iranian company may encounter problems importing an industrial device that a similar company in a country with normal banking relationships does not face. Even if the Iranian company has enough capital and personnel, the difficulty of paying money to the foreign supplier or providing the required parts may disrupt its operations. Monetary instability is another important problem of Iran's economy. High inflation reduces the purchasing power of households and makes financial planning difficult.

Closed economy Why is Iran at the bottom of the economic freedom table? Hamed Wahidi / Author of the publication Economic freedom in simple language means to what extent people can decide about their work, income, savings, investment and economic activity. Economic freedom is not only limited to low or high taxes, but is also related to a set of institutional and political conditions that shape people's economic lives. To examine this issue, the Fraser Institute's 2026 report titled Global Economic Freedom is considered one of the most important sources. According to this report, Hong Kong was ranked first in economic freedom in 2024, followed by Switzerland, Singapore, New Zealand and the United States. On the other hand, Iran is among the ten countries with the lowest score of economic freedom. The Global Economic Freedom Index examines economic freedom in five main areas. The first area is the size of government. In this part, factors such as government spending, taxes and the level of the government's financial involvement in the economy are examined. The basic idea is that when the government captures a large share of economic resources through taxation and public spending, the scope of choice of individuals and companies may be limited. However, the smallness of government in itself is not a sign of positive economic performance. A government that is unable to provide security, enforce the law and provide public infrastructure may harm economic activity. One of the most important obstacles to economic activity in Iran is the difficulty of establishing proper communication with the global economy. International sanctions, banking restrictions, money transfer problems and difficulty in accessing certain technologies and equipment increase the cost of foreign trade. For example, an Iranian company may encounter problems importing an industrial device that a similar company in a country with normal banking relationships does not face. Even if the Iranian company has enough capital and personnel, the difficulty of paying money to the foreign supplier or providing the required parts may disrupt its operations. Monetary instability is another important problem of Iran's economy. High inflation reduces the purchasing power of households and makes financial planning difficult.