According to the Central Statistics Agency of Indonesia (BPS), the average monthly household living expenses in Jakarta in 2022 amounted to IDR 14.88 million (approximately USD 960*). This level of expenditure aligns with the lifestyle of Indonesia’s growing middle-income class.

Compared to Tokyo, where rent alone often exceeds JPY 100,000 (approximately USD 650*), living in Jakarta may appear relatively inexpensive. However, what we must consider is how this cost of living compares to local wages and overall price levels in Jakarta.

This article provides an overview of the living expenses of Indonesians residing in Jakarta. Additionally, it explores whether the cost of living in Indonesia is indeed low by introducing comparative data between Japan and Indonesia.

Living Expenses of Indonesians Residing in Jakarta

Below is an excerpt from the Kebutuhan Hidup Layak (KHL) table for Jakarta residents, based on a 2022 survey by Indonesia’s Central Statistics Agency (BPS).

KHL, or “Decent Living Needs,” refers to the minimum level of expenses required for a person to lead a healthy and dignified life. In other words, to maintain a physically and mentally sound lifestyle in Jakarta without facing deprivation in food, clothing, or shelter, the following monthly costs are considered necessary.

Based on the above data, we will now delve further into the cost of living for Jakarta residents.

Reference: CNBC Indonesia, “Biaya Hidup di Kota-Kota Besar RI, Jakarta Paling Mahal”

Minimum Wages Have Increased but Remain Inadequate

In 2024, the Upah Minimum Provinsi (Provincial Minimum Wage, or UMP) for Jakarta was set at IDR 5,067,381 per month (approximately USD 327*), reflecting an increase of IDR 165,583 (approximately USD 11) from 2023.

This UMP is determined based on the KHL figures of each respective region, as presented in the table above. However, receiving the minimum wage does not guarantee a stable livelihood. As shown earlier, the KHL for Jakarta is IDR 5,135,818 (approximately USD 332), indicating that the cost of living surpasses the minimum wage.

For individuals earning at or slightly above the minimum wage, there is generally little room for savings or investment. Even though Jakarta’s minimum wage has increased, many people still struggle to cover their daily living expenses.

Reference: CNBC Indonesia, “Biaya Hidup di Kota-Kota Besar RI, Jakarta Paling Mahal”

Major Cost Burdens in Jakarta Residents’ Living Expenses

For instance, if a household in Jakarta includes two individuals earning minimum wage, the combined household income would be approximately IDR 10 million (around USD 645*). While this is considered relatively high in the national context, it is still insufficient when factoring in Jakarta’s cost of living.

Many residents face the burden of the gap between their income and the cost of living. One of the main causes of this gap is that Jakarta’s prices are significantly higher than those in other regions. Additionally, households living in rented accommodations away from their hometowns incur extra costs.

According to the 2022 Survei Biaya Hidup (SBH: Cost of Living Survey) conducted by Indonesia’s Central Statistics Agency, the highest spending category for Jakarta residents is electricity (6.6% of expenditures), followed by rental housing (5.6%), fuel (4.9%), and furnished apartment rent (4.3%).

Many of these high-expenditure categories involve contractual obligations, which are not easily reduced through personal effort alone. As a result, many people are compelled to cut back in other areas of daily life—such as eating simpler meals or purchasing used motorbikes and electronic appliances—to save money.

On the other hand, these averages do not always reflect the full picture in Jakarta. At PT. TRICRUISE MARKETING INDONESIA, we are capable of conducting more targeted research to investigate the actual lifestyles of potential Indonesian customers who may be interested in purchasing your products. Companies interested in such customized research are welcome to contact us for further information.

References:

• Kompas.com, “Menyiasati Mahalnya Biaya Hidup di Jakarta”
• Kompas.com, “Ketika Biaya Hidup di Jakarta Hampir Tembus Rp 15 Juta, Tapi UMR Masih di Kisaran Rp 5 Juta per Bulan”

Indonesian Cities with the Highest Cost of Living

Top 10 Most Expensive Cities in Indonesia

Outside of Java Island, cities such as Makassar (capital of South Sulawesi), Kendari (capital of Southeast Sulawesi), Batam (largest city in the Riau Islands), and Balikpapan (second-largest city in East Kalimantan) made the list.

These cities not only rank high in terms of population size but are also home to major trading ports or rich in natural resources like oil, making them hubs of economic activity in Indonesia. Consequently, while the cost of living is high, there are many high-paying jobs available, attracting people from rural areas of the same islands seeking better income opportunities.

Comparing Prices Between Jakarta and Japan Using Café Menus

One way to understand the price difference between Indonesia and Japan is to compare typical café menu items. The following table shows the prices of popular drinks and desserts in both countries.

Tamani Kafe, which has 10 branches in Jakarta including one in the middle-income Kota Kasablanka shopping mall, was selected as the Indonesian café representative. For Japan, we selected Doutor Coffee Shop, a mid-range chain, and Ginza Renoir, a higher-end café.

As shown above, the menu prices at Tamani Kafe and Doutor Coffee are nearly identical. Although Indonesia is often thought of as a country with lower prices, the price gap between middle-income cafés in Jakarta and Japan is minimal.

While Ginza Renoir’s prices are nearly twice as high as the other two cafés, cafés in Jakarta that are considered “high-end” fall into a similar price range. Even Starbucks, which is considered a premium chain, has comparable pricing. Nevertheless, all branches of Starbucks in Jakarta are usually filled with local Indonesian customers.

Moreover, prices in shopping malls that cater to Jakarta’s middle- to upper-income consumers—for dining, fashion, cosmetics, and electronics—are now nearly on par with Japan. PT. TRICRUISE MARKETING INDONESIA offers local site visit arrangements for those interested in firsthand observation.

References:

• Tamani Kafe “Menu”
• Doutor Coffee “Menu”
• Ginza Renoir “Menu”

The Lifestyle of Indonesia’s Wealthy

The Indonesian travel information site TribunTravel.com once published an article showcasing how the children of Indonesia’s affluent class spend their holidays. The article featured luxurious pastimes such as yachting, horseback riding, cruising through the archipelago, and spending hundreds of thousands of yen on a single meal.

This article has so far highlighted that Jakarta’s high cost of living is not matched by sufficient wage levels, making it difficult for many residents to enjoy financial security. However, this does not apply to everyone.

Those categorized as “wealthy” or “ultra-wealthy,” who earn significantly more than the average person, are the exception. In recent years, the proportion of these two income groups has been increasing in Indonesia, and services catering to this affluent demographic have become more prevalent.

Indonesian Wealthy Family Purchases Three Luxury Homes in Singapore

In 2023, an Indonesian wealthy family made headlines by purchasing three luxury homes in Singapore for a total of IDR 2.3 trillion (approx. USD 148 million*). All three homes are located along Nassim Road, known for its exclusive residences. Each property spans 1,406 square meters and includes a swimming pool and five bedrooms.

The buyers remain publicly unnamed but are believed to have purchased the properties for personal use rather than investment. This unusual transaction was widely covered by local media.

Reference: Kompas.com, “3 Rumah Mewah di Singapura Dibeli Orang Kaya Indonesia Rp 2,3 Triliun”

Cost of Living in Urban vs. Rural Indonesia

Although Indonesia’s economy continues to grow, many people still perceive the country as a “low-cost” destination. While this may be true for certain items—such as housing rent, which tends to be more affordable than in Japan—the gap in prices for food, entertainment, daily necessities, and other goods between the two countries is rapidly narrowing.

This is particularly evident in urban areas such as Jakarta, where the cost of living is relatively high. Those who visit with the expectation of significantly cheaper living expenses may find themselves surprised by unexpected costs, so caution is advised.

While this article has focused primarily on living costs in Jakarta, it is important to understand that both cost of living and wage levels vary significantly between urban and rural regions in Indonesia. For companies considering entering the Indonesian market, it is essential to research not just national averages but also detailed local conditions in their specific target areas.