Unemployment rate falls to 4.65 per cent, its lowest since 1994

Jakarta (ANTARA) — The government said Indonesia’s open unemployment rate had fallen to 4.65 per cent, its lowest level since 1994.

“The government continues to monitor labour-market dynamics as a key indicator of public welfare and the effectiveness of economic policy. The open unemployment rate of 4.65 per cent reflects the success of various programmes to stimulate the real sector and investment, helping to meet labour-market needs,” said Haryo Limanseto, spokesperson for the Coordinating Ministry for Economic Affairs, in a statement in Jakarta on Tuesday.

Under the methodology based on International Labour Organization (ILO) and Statistics Indonesia (BPS) standards, the open unemployment rate is measured as the proportion of jobseekers in the total national labour force.

Haryo said the 4.65 per cent rate in 2026 demonstrated the strength of the national labour market’s capacity to absorb workers, with the economy bringing unemployment close to the 1994 level of 4.36 per cent.

The achievement reflects the effectiveness of a sustained national economic recovery.

It is particularly significant given that Indonesia’s labour force had grown substantially by 2026, reaching 155.41 million people, almost double the roughly 83.32 million recorded in the 1990s.

“Bringing the open unemployment rate close to its lowest level despite the sharp increase in the labour force underscores the rapid creation and absorption of new jobs across various sectors of the economy,” Haryo said.

As a historical comparison, the national unemployment rate surged to 11.24 per cent in 2005, amid weak labour absorption and domestic economic pressures following the monetary crisis, when conditions had yet to improve.

It then reached 7.07 per cent during the COVID-19 shock in 2020.

The consistent decline to 4.65 per cent in 2026 demonstrates the effectiveness of economic management and the recovery of the competitiveness of domestic industry.

“The government remains committed to improving the quality of the labour force through vocational training, upskilling and greater industrial utilisation. Our focus is not only on keeping unemployment low, but also on ensuring quality employment that directly improves people’s living standards,” Haryo said.