West Java's Economic Growth Increases In The Third Quarter Of 2025, But More Unemployment Is Increasing

JAKARTA - Bank Indonesia (BI) Representative of West Java noted an economic anomaly in this province, where economic growth was followed by an increase in the unemployment rate due to pressure on the textile sector and textile products.

Head of BI West Java Muhammad Nur explained that the West Java economy grew 5.20 percent on an annual basis (year on year / yoy) in the third quarter of 2025.

However, the open unemployment rate (TPT) increased to 6.77 percent or about 1.78 million people as of August 2025, triggered by a wave of layoffs (PHK) in the textile industry over the past year.

"Tekstil is a labor-intensive industry. When this sector is depressed and there are layoffs, the impact will be felt immediately on the unemployment rate," said Nur at the BI Building, West Java, Bandung, quoted by Antara, Tuesday, November 11.

He assessed that this situation shows the importance of diversifying the source of economic growth so that it does not depend on one labor-intensive sector.

BI West Java, he said, encouraged local governments to strengthen other sectors that have great potential to absorb labor, such as micro, small and medium enterprises (MSMEs), agriculture, and plantations.

Many countries are interested in Indonesian MSME products. This is a great opportunity to expand production as well as create new jobs," he said.

In addition, BI considers strengthening vocational training to be a strategic step so that workers are ready to face changes in industrial needs.

"Investment of electric vehicles is increasing rapidly. Therefore, training at SMK and vocational institutions needs to be directed so that graduates are ready to enter the industry," he added.

Meanwhile, West Java Regional Secretary (Sekda) Herman Suryatman admitted that the increase in unemployment was in line with the slowdown in the textile industry which made many companies lay off workers.

However, Herman is optimistic that this trend will improve in line with the central government's policy of adjusting import rates and strengthening domestic industrial protection.

"This is a breath of fresh air so that massive layoffs don't happen again," he said.

The West Java Provincial Government is now focusing on encouraging investment in new sectors such as the electric vehicle industry and the development of coastal areas, as well as expanding vocational training based on industrial needs.

"We are targeting the unemployment rate to drop to 6.75 percent by the end of this year," he said.