Indonesia's Unemployment Challenge: Young People Most Affected

Economic Concerns Highlighted by Kadin Indonesia

Kamar Dagang dan Industri (Kadin) Indonesia has raised concerns about the persistent issues in the Indonesian economy, particularly the high unemployment rate among young people. During the 2025 Kadin National Leadership Meeting, Chairman Anindya Novyan Bakrie revealed that despite overall economic improvement, unemployment remains steady at 4.85%. More alarmingly, 17% of the unemployed are young individuals between 16 and 24 years old.

Investment Efficiency Issues

Anindya also highlighted another critical issue - Indonesia's Incremental Capital Output Ratio (ICOR) stands at 6.3. This figure is significantly higher compared to neighboring countries such as Vietnam (4.6), Thailand (4.4), and Malaysia. A higher ICOR indicates lower investment efficiency, suggesting that Indonesia needs to optimize its investment strategies to improve economic productivity.

Economic Context and Implications

While acknowledging that the current economic condition is better than in previous years, Kadin remains concerned about these key indicators. The high proportion of young unemployed individuals suggests a need for targeted employment initiatives and better alignment between education and industry needs. The investment efficiency issue also calls for more effective capital allocation and potentially structural reforms to enhance economic growth.