The Indonesian government has responded to the International Monetary Fund’s (IMF) projection that the country’s unemployment rate may hit 5% in 2025.
While the forecast was acknowledged, officials emphasized that national employment indicators suggest a more optimistic labor market outlook.
Presidential Communications Office (PCO) Head Hasan Nasbi described the IMF’s data as important input, but not the sole basis for policymaking.
“Forecasts like the IMF’s are useful for anticipating risks,” Hasan said at a press briefing in Jakarta on Tuesday.
Government welcomes IMF forecast as early warning and guidance
Hasan Nasbi said the IMF’s projections serve as constructive feedback for the government to stay alert to global economic headwinds.
“The IMF’s analysis helps us stay proactive in maintaining economic stability,” he explained.
He added that Indonesia also refers to assessments from other global institutions to help fine-tune policy responses.
Nonetheless, Hasan stressed that official policy is more grounded in data from Indonesia’s Central Statistics Agency (BPS).
Baca Juga:
The BPS conducts the National Labor Force Survey (Sakernas), the primary tool used to track unemployment in the country.
BPS data shows declining unemployment in early 2025
Based on Sakernas, the open unemployment rate in Indonesia declined from 4.82% in February 2024 to 4.76% in February 2025.
Hasan highlighted that this modest decline reflects an improving employment landscape despite ongoing economic challenges.
“This means the number of people truly unemployed is decreasing,” he stated.
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He also pointed to a drop in underemployment, or part-time work due to lack of opportunities.
The rate of underemployment fell from 8.52% to 8% over the same period.
Full-time employment increases, indicating stronger job absorption
Hasan noted that the number of full-time workers, those working more than 35 hours weekly, has also increased.
In February 2025, 66.19% of the workforce held full-time jobs, up from 65.60% a year earlier.
He attributed this shift to the creation of new jobs that could offset job losses or layoffs.
“There are layoffs, yes, but more new jobs are being created,” he said.
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This, he argued, is a sign that the labor market remains dynamic and resilient.
Graduates drive labor supply growth and rising job competition
Despite these improvements, Hasan acknowledged that the labor force is growing, particularly from fresh graduates.
Unemployment is not only the result of layoffs, he said, but also due to an influx of job seekers entering the market.
According to the February 2025 Sakernas, high school graduates account for 28.01% of the unemployed population.
The lowest unemployment was seen among diploma holders, especially those with D1 to D3 credentials, at just 2.44%.
Meanwhile, university graduates made up 13.89% of total unemployed, ranking just above diploma holders.
BPS and IMF differ on definition of unemployment rate
The IMF’s projected 5% unemployment rate differs slightly from the BPS figure due to methodology.
IMF defines unemployment as a percentage of the labor force actively seeking work.
Meanwhile, BPS categorizes unemployed individuals as those aged 15 or older who are not working but are job hunting, preparing to start work, or discouraged workers.
This difference in criteria results in varied reporting between international and national institutions.
Still, both datasets offer valuable insights into the nation’s labor dynamics.
Government to use data to shape employment policy going forward
Hasan confirmed that the government is using the latest data to shape upcoming labor and economic policies.
“Indicators like these allow us to remain optimistic,” he told reporters.
While challenges such as layoffs and graduate unemployment persist, he believes the foundation remains strong.
The government is expected to roll out targeted initiatives to boost job creation and reduce unemployment.
He called for continued collaboration with international bodies while prioritizing domestic evidence-based policy.
Indonesia’s labor outlook cautiously optimistic amid mixed projections
The IMF’s forecast remains a useful benchmark, but Indonesian officials argue that domestic data paints a more hopeful picture.
Hasan emphasized that job growth continues to outpace job losses, signaling underlying strength in the economy.
With the BPS data showing rising full-time employment and falling underemployment, optimism remains justified.
However, sustained vigilance is necessary as the country continues navigating post-pandemic recovery and global uncertainty.
Policymakers are expected to balance short-term responses with long-term strategies to ensure inclusive job growth.***
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