Our Middle Class is Collapsing
Translated from Indonesian, summarized and contextualized by DistantNews.
At a glance
Analysis
Documents & data
Context piece
- Indonesia's middle class is shrinking, with nearly 9.48 million people falling out of this group between 2019 and 2024.
- This decline is attributed to rising costs of basic necessities like rice and cooking oil, coupled with increased expenses for education and healthcare.
- The weakening middle class poses a threat to national economic stability, as this group represents a significant portion of consumption and tax revenue.
Indonesia's middle class, once considered a pillar of economic resilience, is facing a significant decline, mirroring the cautionary tale of A.A. Navis's "Robohnya Surau Kami" (The Collapse of Our Prayer Room). The metaphor highlights a societal breakdown due to neglect, now applied to the nation's economic backbone.
The middle class is the main pillar supporting the national economy.
This erosion is not merely a statistical anomaly but a tangible threat to millions of families striving for prosperity. Office workers, educators, healthcare professionals, and small business owners express widespread anxiety. They find themselves caught between not qualifying for poverty assistance and lacking the financial cushion to weather economic storms.
The middle class and those aspiring to join it make up 66.35 percent of the total population and contribute 81.49 percent of national consumption.
The struggle is real, with incomes barely keeping pace as prices for essential goods like rice and cooking oil surge. Post-subsidy fuel price hikes, coupled with rising education and healthcare costs, force many into "eating their savings" (mantab) just to make ends meet. This phenomenon, known as downtrading, is confirmed by Bank Mandiri economist Andry Asmoro.
A country with a strong middle class has a much stronger foundation for development.
Data from the Central Statistics Agency (BPS) reveals a stark reality: the middle class has shrunk from 57.33 million in 2019 to 47.85 million in 2024. This represents a loss of approximately 9.48 million individuals who have fallen into vulnerable categories. These are not just numbers; they represent families making difficult choices, such as transferring children to cheaper schools or cutting back on daily nutrition. The World Bank classifies most of Indonesia's middle class as 'aspiring,' making them highly susceptible to economic shocks like illness, job loss, or food price spikes, which can easily push them into poverty.
The middle class and those aspiring to join it make up 66.35 percent of the total population and contribute 81.49 percent of national consumption.
DistantNews Editorial
Originally published by Republika in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.
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