Summary
The growing middle class was once considered the engine of Indonesia’s leap to upper-middle income status. But 2024 revealed a startling statistic – the middle class in the world’s fourth most populous nation is shrinking, even as its economy grows at a healthy 5%. Compared to 2019’s numbers, over nine million Indonesians fell out of the middle class.
What lies behind this drop? Is it simply the long-tail effect of COVID-19, or have taxation, inflation and inequality changed what it means to be middle class in Indonesia? And with a new president at the helm, promising an 8% GDP growth, will the middle class be lifted by Prabowo's economic plans, or dragged down by them?