'About half a million people will lose their jobs this year. Especially those in the construction, manufacturing and the plantation sectors,' Indonesian Employers Association chairman Sofjan Wanandi told AFP.

'There will also be many layoffs in the textile business but not so many in the financial sector.' Mr Wanandi said the government should act fast in spending on infrastructure projects to stimulate growth.

'We'll be better off if the government can start spending for infrastructure projects this month,' he said, adding that demand from the domestic market has dropped in line with tumbling commodity prices.

'Many medium and small companies will be out of business compared to the big ones, which have better cashflow.'

Growth in South-east Asia's biggest economy exceeded six per cent last year but the government is targeting 4.5-5.5 per cent this year. -- AFP