Indonesia's Competitiveness Ranking Slips to 48th, Infrastructure Under Scrutiny

Indonesia’s global competitiveness ranking has suffered another decline in 2026. The latest IMD World Competitiveness Ranking 2026 places Indonesia at 48th out of 70 countries, down eight spots from 40th position last year. This decline prolongs a trend of weakening national competitiveness over the past two years. After recording its best-ever position at 27th in 2024, Indonesia has now lost 21 places in just two years. The situation has drawn the government’s attention as it reflects persistent challenges in improving the investment climate, business efficiency, and infrastructure quality. The IMD World Competitiveness Ranking measures a country’s competitiveness through four main indicators: Economic Performance, Government Efficiency, Business Efficiency, and Infrastructure. Among these four categories, the infrastructure sector received the lowest assessment for Indonesia this year. In the Infrastructure category, Indonesia ranked 58th with a score of 31.92. This position fell one level from 57th the previous year and represents the lowest achievement since at least 2019. Within the Infrastructure group, the Health and Environment subcategory was the weakest point, ranking 65th globally. Meanwhile, the best-performing subcategory was Basic Infrastructure, which placed 42nd. On the other hand, Economic Performance was the indicator with the most positive results. Indonesia maintained its 24th position with a score of 59.89, unchanged from 2024. In this category, the Prices subcategory was the most competitive, ranking 10th globally, whilst the International Trade subcategory was the lowest aspect at 50th place. The Government Efficiency category also presented its own challenges. Indonesia ranked 38th with a score of 55.96, marking its lowest achievement in several years since 2019. Within this category, the Taxation aspect was the strongest, ranking 10th, whereas the Societal Framework was the lowest at 54th. The sharpest decline occurred in the Business Efficiency category. Indonesia plunged to 50th position after previously being ranked 26th. This achievement is also the lowest since 2019, even though in 2024 this category had reached 14th place globally. In the Business Efficiency category, the Management Practices subcategory was the weakest aspect at 55th place, whilst the Labour Market subcategory was the best at 21st. Responding to the decline in Indonesia’s competitiveness ranking, the government stated it would conduct further evaluation to identify the factors causing the weakening of the country’s position in the global ranking. Coordinating Minister for Economic Affairs Airlangga Hartarto said the government, through the Task Force for the Acceleration of Government Programmes to Support Economic Growth (Satgas P3-MPPE), would follow up on the report’s findings. The task force is also tasked with unravelling various business obstacles, or debottlenecking. ‘We will examine later where the problems lie. Because we are preparing a debottlenecking team. So we will look at it from there,’ Airlangga told reporters at the Coordinating Ministry for Economic Affairs office in Jakarta on Wednesday (24/6/2026). According to Airlangga, one factor influencing the perception of Indonesia’s competitiveness is growing investor concern over the impact of global geopolitical tensions, particularly those related to the energy sector. He said the government is striving to maintain stability of energy supply, including electricity availability for the industrial, transport, and services sectors. Nevertheless, the government believes investment interest in Indonesia remains sustained. Airlangga revealed that the new and renewable energy sector continues to be a magnet for global investors. The issue was also one of the topics discussed at the OECD Ministerial Council Meeting some time ago, in line with Indonesia’s efforts to strengthen economic competitiveness and attract sustainable investment.