South Korea fell three spots to 17th in the 2025 Heritage Foundation Index of Economic Freedom, despite its overall score rising to 74 from 73.1. The country ranked fifth among 40 Asia-Pacific nations, trailing Singapore, Taiwan, Australia, and New Zealand. Its lowest score came in the labour market category, which dropped to 100th from 87th, reflecting concerns over labour rigidity. Taxation also ranked low at 59.6, placing both categories in the “mostly unfree” classification. Compared to G7 nations, South Korea outscored Germany but lagged behind the United States, Japan, and the United Kingdom. The Korea Enterprises Federation warned that rigid labour policies weaken economic competitiveness and called for reforms. The report noted political uncertainty could impact economic dynamism, though the private sector remains resilient.