Indonesia’s unemployment hits 10-year high, economy enters recession

Indonesia’s open unemployment rate increased to 7.07% in August, 1.84 percentage points higher than the corresponding month in 2019.  

Statistics Indonesia (BPS) estimates that 14.28% of the people in the working age group, or 29.12 million, are affected by COVID-19, including 2.56 million who are unemployed, 1.77 million who are temporarily unemployed and 24.03 million who have experienced a reduction in working hours, according to a recent press release. 

The total of people unemployed in August was estimated at 9.77 million, increasing by 37.61 percentage points year-on-year compared to August last year. 

Indonesia’s economy officially entered its first recession in 22 years after it saw a fall of 3.49% in growth in the third quarter of the year following a contraction of 5.32% in the second quarter amid persistent COVID-19 woes. The last time this happened was during the 1998 Asia Financial Crisis.  

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The pandemic has also led to an increase in informal workers and a fall in formal workers, said BPS head Suhariyanto. The number of informal workers rose by 4.59 percentage points to 60.47% in August, while formal workers made up the remaining 39.53% of the country’s 128.45m-strong workforce.  

Earlier in June, National Development Planning Minister Suharso Monoarfa placed 2020’s unemployment rate at between 8.1% and 9.2%.