JAKARTA, June 19 (Reuters) - Around 6.4 million Indonesians have lost their jobs due to the impact of the coronavirus pandemic and new rounds of layoffs are likely to hit Southeast Asia’s biggest economy by August, the country’s chamber of commerce and industry (Kadin) said.
The Kadin data points to even deeper economic pain than the government’s worst-case scenario for 2020 gross domestic product to contract 0.4%, resulting in 5.23 million people losing work and 4.86 million falling into poverty.
Breaking down some of the losses, the textile industry has laid off 2.1 million workers, land transportation 1.4 million jobs, while footwear makers have shed 500,000 workers and hospitality around 430,000, Kadin chairman Rosan Roeslani said.
Most of the terminated workers were described as furloughed by companies, Roeslani said, noting this was because business owners could not afford mandatory severance benefits.
“The finance minister has said an additional five million unemployed means we’re in a very severe scenario, and I do think we’re there,” Roeslani said.
Kadin expects GDP to shrink by 6% in the April-June quarter, sharper than the government’s forecast for a 3.1% contraction, and also sees negative growth for full-year 2020.
Roeslani said the carmakers association Gaikindo now expects 2020 sales of only 400,000 units, down from a pre-pandemic outlook of 1.1 million and a later forecast of 600,000.
A gradual easing of coronavirus curbs has allowed some rehiring, but Roeslani said more jobs could be lost in July and August due to depressed global trade.
“If there is no support from the government in the form of quickly handed out stimulus, it’s very possible the number of unemployed will rise again,” he said.
The government’s total allocation for COVID-19 response is 695.2 trillion rupiah ($49.45 billion), 42% of which is earmarked for public health and social protection programmes.
While cash and food aid to households had been distributed quite well, other programmes were running more slowly, Finance Minister Sri Mulyani Indrawati told parliament on Thursday. ($1 = 14,060.0000 rupiah) (Reporting by Maikel Jefriando and Gayatri Suroyo Editing by Ed Davies)
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