Finland has been ranked the world's happiest country for the eighth successive year, according to the 2025 World Happiness Report. The annual UN-sponsored report, released on the International Day of Happiness, assesses the quality of life in over 140 nations, measuring factors such as social support, health, freedom, generosity, perception of corruption, and gross domestic product (GDP).
Finland secured the top spot with an average happiness score of 7.74 out of 10, followed closely by Denmark, Iceland, Sweden, and the Netherlands. The Nordic nations have consistently dominated the rankings due to their strong welfare systems, high standard of living, and emphasis on work-life balance.
The 13th edition of the report, compiled by the University of Oxford’s Wellbeing Research Centre, used global survey data to rank countries based on how residents rated their own lives.
For the first time, Latin American nations Costa Rica and Mexico entered the top 10, ranking 6th and 10th respectively. Experts attributed their rise to strong family bonds and close-knit communities.
Meanwhile, the United States dropped to 24th place—its lowest-ever ranking—while the United Kingdom slipped to 23rd. The decline in happiness across these nations was linked to falling social trust and increasing political polarisation.
Top 10 happiest countries in the world (2025 Report)
Finland
Denmark
Iceland
Sweden
Netherlands
Costa Rica
Norway
Israel
Luxembourg
Mexico
India climbed eight places from 126 in 2024 to 118 in 2025, showing a slight improvement in its happiness ranking. However, the country remained behind several conflict-affected nations, including Ukraine, Mozambique, and Iraq.
India performed well in social support, benefiting from its strong community-focused culture and traditions of joint family living. However, it scored poorly in freedom of choice, a factor measuring whether people feel they have autonomy in their lives and if their choices lead to a fulfilling existence.
Among India’s neighbours, Nepal ranked highest at 92, followed by Pakistan at 109 and China at 68. Sri Lanka and Bangladesh ranked lower at 133 and 134, respectively.
Afghanistan was ranked the world’s unhappiest country, primarily due to worsening conditions for women, who reported a significant decline in their quality of life.
Following Afghanistan, Sierra Leone and Lebanon were ranked as the second and third unhappiest countries, respectively. Both nations have faced ongoing challenges, including conflict, poverty, and social unrest.
The 2025 report also provided new insights into human happiness. A key finding was that people are significantly happier in societies where they believe others care about them. A global study measuring trust in strangers found that people were twice as likely to return lost wallets as initially predicted.
John F Helliwell, an economist at the University of British Columbia and a founding editor of the report, stated, "People are much happier living where they think others care about each other."
Jeffrey D Sachs, president of the UN Sustainable Development Solutions Network, reinforced the significance of social bonds, saying: "Happiness is rooted in trust, kindness, and social connection."
Declining happiness in the US and parts of Europe was linked to increasing political polarisation.
Sharing meals with others was strongly associated with higher well-being.
Household size impacted happiness, with four to five people living together reporting the highest happiness levels in Mexico and Europe.
Jan-Emmanuel De Neve, director of Oxford’s Wellbeing Research Centre, emphasised the importance of social connections in an era of increasing isolation. "We need to find ways to bring people around the table again—doing so is critical for our individual and collective wellbeing," he said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
