Indonesia Confirmed to Experience Recession, This is the Impact on Society
LiputanIslam.com— Finance Minister Sri Mulyani predicted Indonesia’s economic growth in the third quarter would be in the range of -2.9 percent to -1 percent. This means that Indonesia is ensured to experience a recession because its economy has contracted for two consecutive quarters.
“This means that negative territory likely occurred in the third quarter,” Sri Mulyani remarked on Tuesday (22/9).
According to an economist at the Institute for Development of Economics and Finance (Indef) Bhima Yudhistira, a recession will have a major impact on society. With the onset of a recession, unemployment will certainly increase.
He explained that the industry’s ability to produce was still being held back due to the COVID-19 pandemic. Many companies could not afford to pay their employees. For that, layoffs are inevitable.
“The third wave of layoffs will broadly happen in almost all sectors, including trade, transportation, and the property business,” he said.
With the wave of layoffs, the number of unemployment in Indonesia would increase. This was also conveyed by Yusuf Rendy Manilet, an economist from the Center of Reform on Economics (Core).
“Another impact is the potential that the number of unemployement will increase because, if we look at several BPS surveys, especially in recent days, it has been stated that many sectors have conducted layoffs to their employees,” he conveyed.
In addition, a recession would also increase the poverty rate. Workers who lose their source of income due to layoffs became vulnerable so that the number of poor people could increase.
According to the World Bank, as many as 45 percent or reaching 115 million of Indonesia’s population are categorized as vulnerable or threatened to return to the poor category.
“Moreover, the number of vulnerable and near-poor people in Indonesia is very high, economic shocks such as a recession will bring their social class down to be poor people,” he said. (sh/kompas/cnbcindonesia/detik)