BKPM Records 18% Increase in Indonesian Employment Absorption
Indonesia’s Ministry of Investment and Downstreaming/BKPM has recorded the absorption of 706,569 workers in the first quarter of 2026, marking a significant surge compared to the same period in the previous year. This growth was officially announced during a press conference at the BKPM office in Jakarta on Thursday (23/4/2026).
The data indicates an increase of 18.9% from the first quarter of 2025, which only absorbed 594,104 workers. According to Ekonomi, investment realisation in the first three months of 2026 reached Rp2,041.3 trillion, demonstrating an improvement in the efficiency ratio for job creation.
The government now requires only around Rp2.89 billion in investment to absorb one worker. This figure is approximately Rp320 million cheaper compared to last year’s requirement of Rp3.21 billion per worker.
Minister of Investment and Downstreaming, Rosan Roeslani, stated that the government will use employment absorption rates as the primary parameter for granting fiscal incentives. Policy focus is now shifting from capital-intensive sectors to labour-intensive ones that can create massive job opportunities.
“Our parameter is not solely about granting incentives due to large investments, but we also consider the employment absorption aspect,” said Rosan Roeslani, Minister of Investment and Downstreaming/Head of BKPM. He cited the coconut processing project in Morowali, which absorbs 10,000 workers despite an investment value of only US$100 million.
However, Yusuf Rendy Manilet, Strategic Research Manager at Core Indonesia, cautioned the public to be careful in interpreting this data surge. He assessed that this phenomenon may not necessarily be structurally good news for the national economy.
Yusuf explained that the surge is likely triggered by projects still in the construction phase, making employment absorption temporary. The quality of jobs is also under scrutiny because many investments are entering sectors with average wages below the national standard.
Based on BPS data from November 2025, the average wage in the processing industry is Rp3.31 million and in other services Rp1.96 million. These two sectors are the largest contributors to investments in the first quarter of 2026, yet their wages are below the national average of Rp3.33 million.
Head of Indef’s Macroeconomics Centre, M. Rizal Taufikurahman, added that this increase is influenced by a low base effect and expansion in low-productivity sectors. He urged the government to focus more on attracting investors to high-value-added sectors to increase real wages for the population.