Shrinking Indonesian Middle Class: Why Are They Struggling? | Asia's Changing Middle Class | Insight

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?

00:00 Indonesia's struggling middle class
01:27 University graduate turned ride-hailing driver
04:17 Indonesia's shrinking middle class
06:06 Economic importance of Indonesian middle class
08:53 Why GDP growth did not translate to middle class growth
12:03 What a family gave up during the COVID-19 pandemic
15:20 Effects of COVID-19 remain
16:39 Workers turn to informal, freelance jobs
19:36 How lower spending affects Indonesia's economy
22:32 Many young university graduates unemployed
24:36 Why unemployment among young people is high
26:06 Importance of manufacturing sector
30:44 How to increase income
33:10 Why are students protesting?
34:11 80,000 Indonesians retrenched
37:55 Measures to help the middle class
40:59 Will US tariffs affect Indonesia?
41:40 How the government can help the middle class
43:01 Can Indonesia reach high income status?

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