Jakarta (ANTARA) – The Institute for Development of Economics and Finance (Indef) stated that government fiscal stimulus must pay greater attention to the middle class amid declining purchasing power from rising living costs and tax burdens.
Riza Annisa Pujarama, a researcher at Indef’s Center of Macroeconomics and Finance, noted that while low-income households receive various government assistance, the middle class also struggle under mounting economic pressure.
“The real concern is the middle-class population, which has been shrinking year after year. This is what actually needs the government’s attention,” Pujarama said during an online discussion in Jakarta on Thursday.
Statistics Indonesia (BPS) data shows the middle-class population fell from 57.33 million people (21.45 percent) in 2019 to 47.85 million (17.13 percent) in 2024.
The figure dropped further in 2025 to 46.7 million people, representing 16.6 percent of the total population.
Under BPS expenditure standards, the middle class includes individuals spending between Rp2 million (US$110.40) and Rp9.9 million (US$546.48) per month.
Pujarama noted that support for the middle class does not require direct cash transfers, but can instead target cost reductions in education, basic necessities, and healthcare.
She said interventions could include expanding access to education, stabilizing essential goods prices, and granting tax relief on basic needs.
Pujarama also called for expanding state-run early childhood education infrastructure, which remains significantly smaller than the private sector.
She stressed that quality education from early childhood through junior high school provides a vital foundation for human capital development.
Beyond education, she urged the government to keep food prices affordable while considering value-added tax (VAT) relief on essential items.
She highlighted medical equipment for persons with disabilities, such as hearing aids and wheelchairs, which receive VAT exemptions in several countries.
Pujarama added that essential hygiene products for women, including sanitary pads, also warrant consideration for tax exemptions.
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Translator: Shofi Ayudiana, Raka Adji
Editor: Arie Novarina
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