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The proportion of Indonesia’s middle class (Kelas Menengah), which has been driving domestic consumption, has declined for five consecutive years. What exactly is happening to the middle class, which has been a cornerstone of the country’s economic growth?

Introduction

This article refers to data from the report “KELAS MENENGAH INDONESIA DI TENGAH KETIDAKPASTIAN EKONOMI” (“Indonesia’s Middle Class Amid Economic Uncertainty”) published by Katadata Insight Center in February 2025. It explores the changing proportion of the middle class in Indonesia and examines how people in this socioeconomic group are coping with their everyday lives.

A Statistical Look at Indonesia’s Middle Class

Definition of the Middle Class

Indonesia’s Central Statistics Agency (BPS) classifies the economic status of its citizens into five tiers based on the poverty line (GK). Among these, the middle class is defined as those whose economic power is 1.5 to 3.5 times the poverty line—individuals who are considered “economically stable and unlikely to fall back into poverty or vulnerability.”

As of 2023, Indonesia’s poverty line is defined as a monthly per capita expenditure of IDR 550,458 (approximately USD 35.05*). This means that Indonesia’s middle class consists of individuals whose monthly expenditures range from IDR 1,930,000 (approximately USD 122.92*) to IDR 9,360,000 (approximately USD 596.57*).

*Exchange rate used: 1 IDR = 0.0000637 USD (as of May 2025)

Trends in the Number and Proportion of the Middle Class

Source: Katadata Insight Center, “KELAS MENENGAH INDONESIA DI TENGAH KETIDAKPASTIAN EKONOMI” | p.7
Compiled by PT. TRICRUISE MARKETING INDONESIA

Indonesia’s middle class numbered 57.3 million in 2019 but decreased to 47.9 million by 2024. That’s a reduction of 9.4 million people over five years. In percentage terms, this marks a decline from 21.5% to 17.1%.

The downward trend began between 2018 and 2019—before the COVID-19 pandemic. Katadata Insight Center noted that while “the pandemic was not the main cause of the middle class’s decline,” it “clearly exacerbated the situation.”

Meanwhile, the “aspiring middle class” (those on the path toward middle-class status) increased from 128.9 million to 137.5 million, accounting for 48.5% of the population as of 2024. By contrast, the upper class has remained virtually unchanged at around 0.5% over the past decade. This indicates that the shrinking middle class has largely moved downward into the aspiring middle class, rather than upward into the upper class.

Based on survey results targeting the middle class, the report analyzes the reason why they are unable to advance into the upper class:

“Indonesia’s middle class tends to exhibit relatively sound and cautious financial behavior, so it cannot be solely attributed to their financial habits that they are unable to improve their economic standing. Rather, external factors such as economic pressure, inflation, and rising living costs are likely to be hindering their upward mobility.”

Reference: Katadata Insight Center, “KELAS MENENGAH INDONESIA DI TENGAH KETIDAKPASTIAN EKONOMI” | pp. 3, 7–9, 18

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Indonesia’s Middle Class in Visual Media

Daily Life of the Middle Class

Watch the video

Titled “The Ballad of the Middle Class,” this video showcases a day in the life of a middle-class worker. Leaving home early in the morning, they commute more than 30 kilometers to their workplace, enduring packed trains and traffic jams along the way. Overtime work and attempts to avoid the evening rush often result in late returns home.

Despite working from morning to night, life for Indonesia’s middle class is far from easy.

According to a survey by Katadata Insight Center, 69.9% of the middle class responded that their monthly expenditures exceeded their income at some point in the past year. While many in this group have enough financial stability to support daily life without difficulty, they lack sufficient financial leeway to cope with unexpected expenses.

Reference: Katadata Insight Center, “KELAS MENENGAH INDONESIA DI TENGAH KETIDAKPASTIAN EKONOMI” | pp. 18–19

Middle-Class Side Hustles

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According to Katadata Insight Center, about half of the middle-class population engages in side jobs. Popular activities include reselling clothing and cosmetics, selling food and beverages near their homes, and participating in social media affiliate marketing. The most common reasons for having a side hustle are “to increase income for daily living” (70.6%) and “to boost savings” (42.2%)—respondents were allowed to select multiple reasons.

In the featured video, a woman is seen setting up a food stall after returning home from her day job. She appears to be selling banana fritters and seems to be doing quite well.

Reference: Katadata Insight Center, “KELAS MENENGAH INDONESIA DI TENGAH KETIDAKPASTIAN EKONOMI” | pp. 24, 27

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Slowing Growth of Indonesia’s Middle Class

Indonesia’s National Development Planning Agency (Bappenas) estimates that in order for the country to achieve developed-nation status by 2045, the middle class must grow to account for 70% of the population. However, as previously discussed, the current figure does not even reach 20%.

The middle class has long been regarded as a crucial driver of Indonesia’s economic growth due to their strong consumer spending tendencies. However, the data shows that while middle-class individuals continue to spend on food and essential daily goods, they are becoming increasingly cautious about spending on non-urgent durable goods.

At the same time, Indonesia’s middle class displays a strong willingness to engage in side jobs when their primary income is insufficient. Many also express hope that such efforts will lead to an improved standard of living. Whether this once-declining middle class can rebound and regain strength remains an important topic to watch moving forward.