Hong Kong has been ranked the world's freest economy by the Heritage Foundation for the 18th consecutive year since the index was first published in 1995, according to the city's government news website on Thursday.

According to the 2012 Index of Economic Freedom released Thursday, Hong Kong scored 89.9 out of 100, well above the world average of 59.5. Of the 10 economic freedom factors assessed, Hong Kong ranked first in financial and trade freedom, second in investment freedom and property rights, and third in business freedom.

Financial Secretary of the Hong Kong Special Administrative Region government John Tsang said: "We see the role of the HKSAR government as that of an active facilitator. We provide a business-friendly environment where all firms can compete on a level-playing field."

The Heritage Foundation commended Hong Kong's tax system as simple and efficient. It considered monetary stability well maintained in the city. It also noted Hong Kong's economic interaction with the Chinese mainland has become more intense and sophisticated.

The study ranked the degree of economic freedom of 179 economies around the world. Singapore and Australia remained second and third.