According to the latest data from Statistics Indonesia (BPS) the unemployment rate of Indonesia fell to 5.5 percent of the nation's labor force, or 7.02 million people in absolute terms, in February 2016 (compared to an unemployment rate of 5.81 percent one year earlier). The data from BPS also indicate that Indonesia's workforce - remarkably - shrank from 128.3 million in February 2015 to 127.8 million people in February 2016 particularly due to a decline in workers in the agriculture sector.
Although Indonesia's unemployment rate at 5.5 percent of the labor force seems a solid figure, there is criticism on the definition of BPS regarding an 'employed person'. BPS categorizes an individual who is above 15 years of age and who works at least one hour per week as 'an employed person'. This is a rather loose definition of employment and makes Indonesia's unemployment rate 'artificially' low. However, it implies this figure also includes millions of people who spent very little time on (permanent) paid work each week and who can certainly not earn enough to make a decent living.
The data also show that the number of people working less than 35 hours per week climbed to 36.3 million in February 2016, from 35.7 million in the same month one year earlier, implying a decline in availability of permanent job positions. This development is in line with the nation's slowing economic growth trend. In 2015, Indonesia's GDP growth slowed to a six-year low of 4.79 percent (y/y). Meanwhile, in the first quarter of 2016, Indonesia's economic expansion reached a figure of 4.92 percent (y/y), below estimations but - at least - an improvement from GDP growth in the first quarter of 2015.
Indonesia's Unemployment Statistics:
(% of labor force)
¹ in February 2016
Source: Statistics Indonesia (BPS)