The country ranks 48th globally, highlighting the appeal of its large market while exposing persistent gaps in business efficiency, infrastructure and institutional quality.
Indonesia has entered the world’s 50 most competitive economies, ranking 48th out of 70 countries and territories in the 2026 IMD World Competitiveness Ranking. Its normalized score of 57.6 places Southeast Asia’s largest economy ahead of several major emerging markets, although it remains far behind the region’s leading business hubs.
The ranking, compiled by Switzerland-based business school IMD, measures how effectively an economy creates conditions that allow companies to invest, operate and generate sustainable value. It is not simply a league table of economic size or growth.
Key figures
- 48th: Indonesia’s global position
- 57.6: normalized competitiveness score
- 70: economies assessed
- 341: criteria used across 20 subfactors
- Two-thirds: weighting from statistical data
- One-third: weighting from executive surveys
Indonesia sits immediately below the Philippines, ranked 47th with a score of 59.1. It nevertheless outperforms South Africa at 54th, Türkiye at 57th, Argentina at 58th, Mexico at 62nd and Brazil at 65th.
Singapore returned to first place with a score of 100, followed by Hong Kong and Switzerland. The assessment covers four broad pillars: economic performance, government efficiency, business efficiency and infrastructure. Singapore’s strength in business efficiency helped it overtake Switzerland, illustrating the importance of productivity and institutional responsiveness alongside macroeconomic stability.
For Indonesia, a top-50 position provides a broadly positive signal to foreign and domestic investors. Its large consumer market, expanding digital economy and industrial-development agenda remain significant advantages. Companies can also benefit from established manufacturing clusters and supply chains, particularly on Java.
Yet the ranking’s middle-tier position points to continuing friction. Regulatory predictability, logistics costs, workforce capabilities and uneven infrastructure can influence whether Indonesia’s market potential translates into competitive operating returns. National averages may also conceal substantial differences between major industrial centres and less-connected regions.
The result matters for policymakers because Indonesia competes directly with neighbouring economies for factories, technology investment and regional headquarters. Market size can attract initial interest, but investors ultimately compare execution: how quickly permits are issued, goods move through ports, skilled workers can be recruited and commercial rules are enforced.
The ranking should therefore be read as a benchmark rather than a verdict. Indonesia has surpassed several large emerging economies, but closing the gap with Asia’s leaders will require improvements that businesses experience in their daily operations—not only stronger headline growth.