Ministry projects COVID-19 to spike unemployment by five million

Ministry projects COVID-19 to spike unemployment by five million

Unemployement. (Illust./ANTARANews)

Jakarta (ANTARA) - Unemployment in Indonesia is estimated to increase by five million over the economic pressure caused by the COVID-19 outbreak, Head of the Fiscal Policy Agency (BKF) of the Financial Ministry Febrio Nathan Kacaribu stated.

The forecast aligns with Indonesia's economic growth in its worst-case scenario that is expected to contract, Kacaribu remarked.

"We have to be ready for the worst-case scenario wherein a minus growth is forecast. Under such a scenario, unemployment is expected to increase by over five million," he stated during an online discussion here on Monday.

In the baseline scenario, the national economic growth would reach 2.3 percent of the gross domestic product (GDP), and this would result in an additional 2.9 million becoming jobless, he pointed out.

"Economic growth at 2.3 percent of the GDP is the baseline scenario. In such a situation, an additional 2.9 million will become unemployed," he explained.

To this end, Kacaribu highlighted the government’s all-out efforts to maintain economic stability amid pressure from the COVID-19 pandemic to contain the impact on the nation’s unemployment rate.

Kacaribu appealed to all parties to work jointly with the government to mitigate the likely contraction of Indonesia's economy in 2020.

"This is one aspect that we have striven to contain. The government cannot work alone. We need other authorities to overcome the crisis together and to share the burden," he emphasized.

Kacaribu stated that other countries had also forecast a rise in unemployment owing to the coronavirus outbreak, including the United States, which has forecast a sharp rise, from 3.7 percent to 10.4 percent in 2020.

"For instance, in the US, this is unprecedented, as they have never experienced such a high unemployment rate, exceeding 10 percent," he pointed out.

The Central Bureau of Statistics (BPS) noted that Indonesia's unemployment rate had plunged to 5.28 percent in August 2019, from 5.34 percent earlier reported in August 2018.

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