The country’s overall score fell 4% from 6.19 to 5.94, reflecting slight deterioration across several sub-indicators that assess the strength of legal institutions and protection of property rights.
Within the Asia and Oceania region, Malaysia now ranks 7th, maintaining the same regional position as in 2024 despite the global drop.
The decline suggests that other economies in the region have either improved their institutional quality or maintained stronger property-rights protection frameworks.
The IPRI, released by the Property Rights Alliance (PRA), ranks the comparative strength of property rights protection in 126 countries. It is structured around three main pillars — the legal and political environment, physical property rights, and intellectual property rights.
Malaysia saw the sharpest decline in the physical property rights pillar, with its score falling from 6.53 to 5.75 and its global ranking dropping from 27th to 46th.
The deterioration was driven primarily by a worsening perception of physical property rights protection, with Malaysia’s rank slipping from 23rd to 45th despite a score increase from 7.52 to 8.33.
An even more significant setback occurred in access to finance, where the score plunged from 6.66 to 3.40, causing Malaysia’s position to tumble from 7th to 67th globally and from 3rd to 10th within the region.
Under the legal and political environment pillar, the country’s score improved slightly from 5.49 to 5.58, holding its 45th global rank, indicating moderate institutional stability but persistent challenges in judicial independence and political stability.
The intellectual property rights pillar remained relatively stable, with Malaysia’s score marginally decreasing from 6.55 to 6.49 while maintaining its 26th position worldwide, highlighting steady but slow progress in innovation-related legal protection.
Center for Market Education (CME) CEO Carmelo Ferlito said the country’s overall decline calls attention to the need for institutional reforms and improved legal enforcement to strengthen property rights.
“Special attention needs to be paid to the severe drop in the access to finance general conditions. Enhanced protection of physical property rights should become a policy priority to restore investor confidence and sustain Malaysia’s role as a hub for knowledge-driven industries,” he said in a statement.
PRA executive director Lorenzo Montanari said strong legal and political frameworks protect investors’ assets, encourage research and development, and attract investment – spurring growth and technological advancement.
“The benefits offered by strong property rights have solidified these frameworks as a key driver of economic progress and innovation,” said Montanari, who is also the editor of the index.
CME is PRA’s partner for Malaysia and Indonesia.