Indonesia's Competitiveness Ranking Drops to 48th, Government to Form Task Force
The Coordinating Minister for Economic Affairs, Airlangga Hartarto, has responded to the decline in Indonesia’s competitiveness ranking in the IMD World Competitiveness Ranking (WCR) 2026, which has fallen to 48th position. According to Airlangga, Indonesia previously achieved its highest position at 27th in 2024.
Airlangga stated that the government recognises the reasons behind the decline in Indonesia’s competitiveness ranking. Consequently, President Prabowo Subianto has requested the formation of a ‘Debottlenecking Task Force’.
“In truth, we previously improved that figure to 27, and the government understands why it rose. This is why the President has requested the formation of a Task Force to address these bottlenecks,” Airlangga said following the MSME Ease and Protection Festival at the Smesco Building, South Jakarta, on Monday (29/06/2026).
Despite the pressure on competitiveness rankings, Airlangga emphasised that the investment climate in Indonesia continues to show high enthusiasm. He dismissed concerns that the decline in competitiveness would immediately stifle investment interest or cause factories to cease expansion.
Airlangga noted that the government has a series of strategic agendas to increase Indonesia’s attractiveness to global investors.
“However, with Indonesia joining the IEU-CEPA next year, the implementation of the agreement on reciprocal tariffs, and the ongoing OECD process, I am confident that we will continue to improve regulations,” Airlangga added.
Regarding investment, Airlangga explained that investment inflows in the first quarter exceeded targets. He observed that various sectors continue to expand.
“We can see, for example, in the East Java Special Economic Zone, we are currently managing expansions. In Kendal and Batang, locations are almost 100% full. Similarly, in Bintan, it is also nearly at capacity. I also see interest from the data centre sector, for instance, with an additional demand of 1.32 GW or 1.2 GW ready to enter Indonesia,” Airlangga explained.
According to the latest report, IMD has lowered Indonesia’s ranking in the IMD World Competitiveness 2026. In 2025, Indonesia held 40th place, but fell to 48th in 2026.
IMD highlighted several challenges facing Indonesia, ranging from global economic volatility threatening national energy security and relatively stagnant economic growth, to adjustments in government budget allocation, inadequate infrastructure and human resource competence, and limited availability of funding sources.