In Indonesia, the middle-class population has seen a significant decline, dropping from 57.33 million in 2019 to 47.85 million in 2024. This demographic now comprises 66.35% of the total population, amounting to approximately 185.35 million individuals. The middle class is defined as those earning between 2.04 million and 9.90 million rupiah monthly, and they contribute a substantial 81.49% of domestic consumption in Indonesia's US$1.3 trillion economy. President Joko Widodo acknowledged this troubling trend on August 30, 2024, stating that it is part of a global phenomenon. [470010e8]
Economists are sounding alarms about the implications of this decline, warning that a reduced middle class could hinder Indonesia's aspirations to achieve developed-nation status by 2045. Arief Anshory Yusuf, an economist, has pointed out the potential for social unrest, drawing parallels to the situation in Chile. Current economic policies appear to favor the poor, which has led to feelings of alienation among the middle class. [470010e8]
The average monthly spending for the middle class has increased from 2.36 million rupiah in 2019 to 3.35 million rupiah in 2024. However, the scarcity of high-value jobs has resulted in low wages and diminished consumption capacity. This economic strain is prompting calls for new strategies that support the middle class and stimulate economic growth. [470010e8]
The situation in Indonesia reflects broader global trends affecting the middle class, highlighting the need for policymakers to address the unique challenges faced by this crucial segment of the population. As the middle class continues to struggle, the potential for unrest looms, necessitating immediate attention to their economic needs and aspirations. [470010e8]