Unemployment Rate Declines Despite Wave of Layoffs, Prabowo Claims

August 17, 2025 | 03:00 pm

TEMPO.CO, Jakarta - President Prabowo Subianto said that Indonesia’s unemployment rate has fallen to its lowest level since the 1998 monetary crisis.

He made the statement during his address at the Annual Session of the People’s Consultative Assembly (MPR), which was held jointly with the Regional Representative Council (DPD) and the House of Representatives (DPR).

Prabowo cited data from the National Labor Force Survey published by the Central Statistics Agency (BPS). The survey recorded an Open Unemployment Rate of 4.76 percent in February 2025, down 0.06 percentage points from the same period last year. In 1998, the figure stood at 5.46 percent.

"Thank God, today Indonesia’s unemployment rate has reached its lowest point since the 1998 crisis," Prabowo said at the Nusantara Building, Parliament Complex, Senayan, Jakarta, on Friday, August 15, 2025.

However, despite the drop, layoffs have continued to rise throughout 2025. Data from the Ministry of Manpower’s official website show that 9,497 workers were laid off in January, with Banten recording the highest share at 26.79 percent.

The number rose sharply to 17,796 in February, dominated by Central Java with 45.86 percent of the total. In March, 4,987 workers lost their jobs, most of them in West Java at 25.83 percent.

The same trend continued in April with 3,794 layoffs, again led by West Java with 33.18 percent. In May, another 4,702 workers were affected, followed by 1,609 in June. Altogether, 42,385 layoffs were recorded in the first half of 2025.

Labor analyst Tadjudin Nur Effendi from Gadjah Mada University argued that Prabowo’s claim does not provide a full picture of the labor market. He noted that Indonesia’s workforce reached 153.05 million this year, up 0.62 percent from August 2024.

"Clearly, the numbers do not compare proportionally," he told Tempo on Saturday, August 16, 2025.

Tadjudin added that the key issue is not simply the level of open unemployment but the dominance of new graduates among the jobless and the overwhelming share of informal workers. He warned that informal workers remain highly vulnerable.

"They are exposed to change and lack protection altogether. That is what makes the situation risky," he said.

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