TEMPO.CO, Jakarta - The International Monetary Fund (IMF) predicts Indonesia's unemployment rate will reach 5 percent in 2025. This figure becomes the second-highest in Asia after China, which is projected to be 5.1 percent this year.
Based on the World Economic Outlook report of April 2025, the IMF noted a continuous rise in the country's unemployment rate. It was 4.9 percent in 2024, increased to 5.0 percent this year, and is predicted to reach 5.1 percent in 2026. Meanwhile, China's unemployment rate remained at 5.1 percent from 2024 to 2026.
Economist and Lecturer of the Department of Economics at Andalas University, Syafruddin Karimi, stated that the projected increase in Indonesia's unemployment is due to the national economic structure's inability to optimally absorb labor. "This is especially true in labor-intensive sectors," he said on Thursday, May 22, 2025.
Many industries in Indonesia, such as textiles and shoes, face significant pressure. This is due to weak global demand, fluctuations in raw material prices, and high logistics costs. Meanwhile, Syafruddin explained that the technological transformation has not led to an increase in labor skills.
This situation creates a mismatch between industry needs and workforce capacity. "In contrast, China has kept its unemployment rate around 5.1 percent by focusing its fiscal policy on stabilizing domestic consumption and supporting manufacturing," he said.
According to him, Indonesia needs to reorganize its industrialization policy so that job creation aligns with the growth of productive sectors. Without concrete intervention, the unemployment rate will continue to rise, even as the gross domestic product (GDP) grows.
In a press conference in early May 2025, the Head of the Central Statistics Agency (BPS), Amalia Adininggar Widyasanti, reported that the number of unemployed people in Indonesia reached 7.28 million in February 2025. "The number of unemployed people increased by about 83 thousand, or 0.08 million, representing a rise of 1.11 percent," said Amalia.
Meanwhile, the Minister of Manpower, Yassierli, mentioned that the highest unemployment rate in Indonesia is found in the 19-24 age group. Vocational high school (SMK) graduates recorded the highest unemployment rate, followed by senior high school, elementary school, diploma, and university graduates. Yassierli explained that this condition is due to a mismatch between students and their chosen majors.
Annisa Febiola and Adil Al Hasan contributed to the writing of this article
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