Indonesia warns of spike in unemployment rate

The Indonesian government also predicted 4 million to 5.5 million people will lose their jobs this year due to the COVID-19 pandemic.
By: | June 22, 2020
Topics: Asia-Pacific | Indonesia | Job Cuts | News | Southeast Asia

The unemployment rate in Indonesia is expected to rise from 5.28% in 2019 to between 8.1% to 9.2% this year, according to Planning Minister Suharso Monoarfa during a parliament hearing on June 22.

He told members of parliament’s finance commission that the government predicted 4 million to 5.5 million people will lose their jobs this year. The unemployment rate may stay elevated in 2021 at 7.7% to 9.1%, he said.

In May, the Manpower Ministry and the Workers Social Security Agency (BPJS Ketenagakerjaan) reported that 2.8 million people have lost their jobs.

Large-scale social restrictions implemented by regional and local administrations to curb the spread of the virus took effect in April, which have upended the job market.

Indonesia’s gross domestic product in the second quarter was seen contracting by 3.8%, Finance Minister Sri Mulyani Indrawati added during the parliament hearing, slightly more than her previous estimate of a 3.1% shrinkage.