Workers produce mask in Tangerang, Indonesia on April 7, 2020. (Photo: AFP/VNA)
Jakarta (VNA) – Millions of Indonesians may fall into poverty and unemployment as the COVID-19 pandemic batters the Indonesian economy, according to Indonesia’s Finance Minister Sri Mulyani Indrawati.
Under the “bad” scenario, the Southeast Asian country would see more 1.1 million poor and 2.9 million unemployed people. The worst-case scenario projected 3.78 million people would fall into poverty and 5.2 million would lose their jobs.
Statistics Indonesia (BPS) data showed that the country’s unemployment stood at 7.05 million out of the workforce of 133.56 million last year. Meanwhile, 24.79 million people lived in poverty – 9.22 percent of the population – a decline of about 880,000 compared to the year before.
In a severe situation, it is possible that Indonesia’s growth will fall to a negative level, hereby affecting its social and development conditions, Sri Mulyani said during a livestreamed briefing after a Cabinet meeting on April 14.
The government has projected that Indonesia’s GDP growth will shrink to a 21-year low of 2.3 percent this year under the baseline scenario, and the economy could even contract 0.4 percent under the worst-case scenario.
The World Bank recently slashed Indonesia’s economic growth projection from 5.1 percent to 2.1 percent this year as a result of the pandemic. It also projected more than 11 million people could fall into poverty in the East Asia-Pacific region, a stark contrast to its earlier forecast that economic growth would be enough to lift 35 million people out of poverty this year.
As many as 2.8 million Indonesian people had lost their jobs as of April 13, according to data from the Manpower Ministry and the Workers Social Security Agency. More than half were furloughed and placed on paid or unpaid leave.
In addition, about 70 million informal workers were at risk, as they had lost their incomes as a result of social distancing rules.
Indonesia has earmarked 436.1 trillion IDR (26.36 billion USD) in funding, equivalent to 2.5 percent of the country’s GDP, for stimulus packages focusing on health care, social protection and economic recovery programmes./.
