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Australia’s economic and military resources have declined relative to other countries, meaning it will need to work harder with what it has to maintain influence in Asia.
Susannah Patton
Susannah Patton is Director, Asia Engagement at RMIT and a Nonresident fellow at the Lowy Institute.
Jack Sato
Jack Sato is a Data Analyst for the Asia Power Index at the Lowy Institute.
Australia recorded a small decline in its comprehensive power in Asia in 2025. Its ranking fell back to sixth place, more due to Russia’s resurgence than its own negative performance.
Even so, several aspects of Australia’s 2025 performance raise questions about the country’s longterm relative power in Asia. Notably, the slower pace at which Australia is modernising and expanding its armed forces compared to other countries in Asia contributed to its declining score for military capability, with static or negative scores on almost all indicators for this measure. Though Australian defence strategic planning has indicated an intention to acquire more lethal and longer-range weapons, this has yet to be translated into the delivery of tangible new military capabilities.
Likewise in terms of economic capability, Australia’s performance declined slightly, both in terms of the relative size of its economy and the qualities of the economy conferring geopolitical advantage: technology, connectivity, and international leverage.
Taken together, Australia’s performance in these two resource measures does not substantiate a dramatic narrative suggesting that Australia is in immediate danger of losing relevance in Asia. However, it does suggest that in a more competitive region, business as usual will not be sufficient for Australia to sustain its position, either as a military or economic power.
By contrast, Australia’s regional influence, measuring the extent of its economic, diplomatic, and defence engagements with countries in Asia, has mostly remained steady, a result of the Albanese government’s strong focus on the Indo-Pacific region. The interplay between Australia’s relatively declining economic and military resources and its continued strong performance in the Index’s influence measures means Australia’s positive Power Gap score remains the second-largest of any Index country after Japan.
