The Indonesian Middle Class: An Economic Pillar Under Pressure – Academia

According to the World Bank’s classification of expenditure classes, as detailed in the report “Aspiring Indonesia: Expanding the Middle Class”, Statistics Indonesia (BPS) reported that the share of the middle class will be only 17.13 percent of Indonesia’s total population of about 280 million in 2024. This amounts to about 47.85 million people, a decrease of 0.42 million from 2023, when the number was 48.27 million, or 17.44 percent.

The decline is even more pronounced compared to 2019, when the share was 21.45 percent. This decline is not just a statistical figure, but a serious alarm for the national economy, which is highly dependent on the purchasing power and contributions of the middle class.

The World Bank categorizes the population into five welfare classes: poor, vulnerable, aspirational middle class, middle class, and upper class. The middle class is defined as those whose daily expenditure is between 3.5 and 17 times the poverty line.

This group has less than a 10 percent chance of falling into poverty or vulnerability, with per capita consumption in 2024 ranging from Rp 2.04 million (US$133.82) to Rp 9.91 million per month ($7.75 to $38 per day based on the purchasing power parity of the rupiah).

The middle class has long played a crucial role as an economic buffer for the nation, making a significant contribution to total household consumption that supports Indonesia’s economy.

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In 2019, middle-class consumption accounted for about 43.39 percent of total household consumption. However, from 2020 to 2024, the share of middle-class consumption relative to total expenditure has steadily declined. Although the decline has not been drastic – from 43.39 percent in 2019 to 38.28 percent in 2024 – this ongoing trend could have a significant impact on the economy if it continues.