New Risks from Labor Surplus and Minimum Wage

Summary

Indonesia's economic growth has been accelerating since 2000, with the gross domestic product (GDP) staying above five percent per year, resulting in a higher community's average income by 50 percent.

However, President of the Boston Institute for Developing Economies Professor Gustav F. Papanek said Indonesia's economic growth would likely be sluggish in the future due to the economic slowdown in its main trading partners.

China, for example, saw its economic growth slowing down due to various reasons. China's GDP had stayed above 10 percent per year from 1990 through 2010. However, the International Monetary Fund (IMF) estimates that growth in 2022-2023 will only be 5.2 percent, thus potentially reducing Indonesia's export demand.

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