Why Have Economic Policies Yet to Significantly Improve Indonesia's Labour Market? LPEM UI Survey Findings

Jakarta — Economic experts have concluded that current policies are providing no significant impact in improving Indonesia’s labour market conditions.

A survey by the Institute for Economic and Social Research at the Faculty of Economics and Business, University of Indonesia (LPEM FEB UI) reported that 15 respondents who are economists rated the policies as very ineffective, and 28 respondents rated them as ineffective.

Meanwhile, the largest group of respondents, comprising 36 individuals, believed that existing policies have no bearing on labour market conditions.

More positive assessments were relatively scarce, with only five respondents rating the policies as effective and just one deeming them very effective.

“The overall average score was recorded at -0.45, reflecting a slightly negative assessment of policy effectiveness,” the LPEM Economic Expert Survey for the first semester of 2026 stated.

This score represents a more cautious view compared with the previous survey, when the average score stood at -0.20.

The shift indicates that perceptions of policy impact on labour market conditions have weakened over time.

Nevertheless, respondents continued to demonstrate relatively high confidence levels in their assessments, with an average confidence rating of 7.66 out of 10.

The survey results showed that 18 respondents rated fiscal policy as very ineffective and 34 respondents rated it as ineffective.

“Thus, a total of 52 out of 85 respondents provided negative assessments,” the report stated.

By comparison, 18 respondents believed fiscal policy had no meaningful impact.

Meanwhile, 13 respondents rated the policy as effective and only two deemed it very effective.

“The average score of -0.62 indicates that overall perception still falls on the less effective side of the assessment scale,” the report added.

However, this figure reflects a modest improvement compared with the previous survey, which recorded an average score of -1.05.

In other words, this finding suggests that although experts’ assessments remain cautious, perceptions regarding fiscal policy effectiveness show a slightly more positive trend compared with previously.

Respondents also reported relatively high confidence levels in their assessments, with an average confidence rating of 7.84 out of 10.

Some 35 respondents rated monetary policy as having no meaningful impact in controlling inflation or managing the rupiah exchange rate.

On the other hand, 26 economist respondents rated the policy as ineffective and four deemed it very ineffective.

More positive assessments also emerged, with 18 respondents rating monetary policy as effective and two rating it as very effective.

“The average score was recorded at -0.14, which sits fairly close to the neutral point on the assessment scale. This value indicates quite clear improvement compared with the previous survey, when the average score stood at -0.66,” the statement said.

This shift indicates that perceptions of monetary policy performance have become more positive over time.

Respondents also reported fairly strong confidence levels in their assessments, with an average confidence rating of 7.46 out of 10.