The annual report on the matter, issued by The Wall Street Journal and the said foundation, measures 161 countries against a list of 50 independent variables divided into 10 broad factors of economic freedom.
According to the report Croatia has been making constant progress in the economic freedom since 1996 when the country was for the first time covered by the report.
"Croatia"s fiscal burden of government score is 0.1 point better this year, and its monetary policy score is 1 point better. As a result, its overall score is 0.11 point better this year," the report read.
Regarding the fiscal burden "Croatia"s top income tax rate is 45 percent, up from the 35 percent reported in the 2004 Index. The top corporate tax rate is 20 percent. In 2003, based on data from the Ministry of Finance, government expenditures as a share of GDP increased 0.1 percentage point to 45.6 percent, compared to an 8.5 percentage point increase in 2002. As a result, Croatia"s fiscal burden of government score is 0.1 point better this year," read this year's report.
The section on monetary policy reads that "from 1994 to 2003, Croatia"s weighted average annual rate of inflation was 1.13 percent, down from 3.16 percent from 1993 to 2002. As a result, Croatia"s monetary policy score is 1 point better this year."
Croatia has scored the average mark 3.00 on the scale including marks for trade policy, fiscal burden, government intervention, monetary policy, foreign investment, banking and finance, wages and prices, property rights, regulation and informal market.
Croatia has scored the best mark for its monetary policy (score 1.0), with the poorest performance (score 4.0) in the sector of regulation due to the bureaucracy and red tape, as well as in property rights due to cumbersome and inefficient court system.
The greatest surprise of the latest report is the United States which has been eliminated from the top ten countries with the freest economy. The US has come in 12th.
The first two countries are Hong Kong and Singapore. They are followed with European countries: Luxembourg, Estonia and Ireland. New Zealand is the sixth, The next three countries are European countries -- Great Britain, Denmark and Iceland. Australia is the last on the list of top ten countries.