Indonesia’s global competitiveness ranking dropped to 48th in 2026, according to reports from Bloomberg Technoz and detikFinance. The Indonesian government is currently analyzing the causes of the decline, while Kompas.com identifies poor infrastructure and low business efficiency as the primary drivers behind the slump.
Why did Indonesia’s competitiveness rank drop?
The decline is linked to systemic burdens in infrastructure and business efficiency, according to Kompas.com. These factors have hindered the country’s ability to compete effectively on a global scale. In response to the rankings, the government has initiated a review to determine the specific causes of the slide, according to detikFinance.
Data regarding the exact position varies across local reports. While Bloomberg Technoz and detikFinance state the country fell to 48th place, Kompas.com reports a more severe drop to 58th globally.
How does Indonesia compare within ASEAN?
Indonesia continues to trail behind its regional neighbors in competitiveness. Singapore maintains the top position as the most competitive country in ASEAN for 2026, according to DataIndonesia. The gap between Singapore’s performance and Indonesia’s suggests a significant disparity in how the two nations manage business environments and technical infrastructure.
What are the implications for foreign investment?
The sharp decline in ranking has raised concerns regarding the country’s attractiveness to external capital. According to kontan.co.id, the “free fall” in competitiveness serves as a signal that investors are becoming increasingly worried about the business climate in Indonesia.
The intersection of infrastructure gaps and efficiency issues creates a higher cost of doing business, which typically discourages foreign direct investment in technology and industrial sectors.
