Faisal Maliki Baskoro, Jakarta – Indonesia has suffered a sharp decline in its global competitiveness, falling 13 spots to 40th place in the 2025 World Competitiveness Ranking (WCR) released by the IMD World Competitiveness Center (WCC) recently. The country now trails regional neighbor Malaysia, which surged 11 places to rank 23rd globally.
Indonesia had previously seen steady gains in recent years, climbing from 44th in 2022 to 34th in 2023, and then to 27th in 2024, before experiencing this significant setback.
The annual ranking evaluates countries across four key pillars: economic performance, government efficiency, business efficiency, and infrastructure. Indonesia ranked 24th in economic performance, 34th in government efficiency, and 26th in business efficiency, but continued to lag in infrastructure, placing 57th.
"Indonesia is faced with integrating a strategic map from upstream to downstream processing. It needs to develop a productive workforce capable of enhancing competitiveness in the global economy," stated the Lembaga Management, Faculty of Economics and Business, Universitas Indonesia (LM FEB UI), IMD's local research partner.
Arturo Bris, Director of the WCC, noted that while Asia continues to perform well in terms of economic opportunity, external pressures are weighing heavily on Southeast Asian countries.
"The external environment is penalizing some Asian economies. The tariffs imposed on Southeast Asian economies are wiping out the benefits of their otherwise sound policies," Bris said.
He added that factors such as strong currencies and access to trade networks are becoming key drivers of long-term competitiveness. "Consensus is proving to be beneficial for economies, unlike the disruptive effects of polarization," he added.
Switzerland, Singapore, and Hong Kong lead the 2025 rankings as the world's most competitive economies. Other notable climbers in the top 20 include Canada, Germany, and Luxembourg.
Top 10 Most Competitive Economies in 2025:
- Switzerland
- Singapore
- Hong Kong
- Denmark
- United Arab Emirates
- Taiwan
- Ireland
- Sweden
- Qatar
- Netherlands
Source: https://jakartaglobe.id/business/indonesia-drops-13-places-in-imds-global-competitiveness-rankin