Real Impact of Rupiah Weakening on the Middle Class Group

JAKARTA - In the first two weeks of January, the exchange rate approached Rp17,000 per US dollar. If the depreciation continues, the middle class community group will again be the most affected.

The depreciation of the rupiah exchange rate has occurred since the end of 2025. Data from the Ministry of Finance recorded that the realization of the rupiah exchange rate throughout the year averaged Rp16,475 per US dollar. Towards the end of 2025, the rupiah exchange rate continued to be depressed to Rp16,700 per US dollar. For comparison, the rupiah exchange rate as one of the basic assumptions of the 2025 State Budget was pegged at Rp16,000 per US dollar.

Entering the first and second weeks of January 2026, the rupiah is under pressure in the range of Rp. 16,785 to Rp. 16,880. In the first two weeks of the beginning of the year, the exchange rate is approaching the orbit of Rp. 17,000 per US dollar. A number of economists predict that the rupiah exchange rate operates in the orbit of Rp. 17,000 per US dollar.

The middle class, again, is the group most affected by the weakening of the rupiah.

External pressure is one of the causes that have put the rupiah under pressure. It is known that geopolitical conditions are getting hotter, such as tensions in the Middle East, Venezuela, and the Black Sea, which pushed oil prices to high levels due to concerns about supply disruptions.

Factors in the US domestic conditions, such as reduced unemployment and still high inflation, have an impact on the strengthening of the US dollar and weakening the currencies of other countries, including the rupiah.

In addition to external factors, domestic conditions also contribute to the depreciation of the rupiah. In the country, the Director of Economics at the Center for Economic and Law Studies (Celios) Nailul Huda highlighted the performance of the State Budget (APBN) 2025 which recorded a widening deficit.

The high spending condition is not balanced by adequate state revenues, which is considered to raise concerns about fiscal sustainability.

"The second is the swelling debt that can collapse our fiscal condition. Accumulating debt makes fiscal performance not optimal in development," explained Huda.

This poor fiscal management is considered as "gasoline" that accelerates the weakening of the rupiah. If there is no strong intervention from the monetary authority and improvement in budget management, the figure of Rp17,000 per US dollar is no longer a threat, but a bitter reality that the industry and consumers must face in early 2026.

In fact, Airlangga University Professor Rahma Gafmi predicts that the rupiah will depreciate further to the level of Rp20,000 against the US dollar.

"If the depreciation of the rupiah continues, various lines can be affected, including triggering imported inflation or imported goods inflation," said Nailul Huda. He cited food commodities such as tofu and tempeh which have the potential to be affected because the soybean raw materials are still dominated by imports. That way, consumers will bear the surge in goods.

"There is a tendency for prices to increase beyond expectations," Huda said via an SMS to VOI.

The Central Statistics Agency (BPS) recorded that the national inflation rate for December 2025 was 2.92 percent on an annual basis or higher than December 2024 at 2.26 percent. However, the inflation rate is still within the 2025 inflation target set by Bank Indonesia in the range of 2.5-3.5 percent.

The increase in food prices, said Huda, also has an impact on the psychological level of the community which will be disturbed, especially the problem of concern about the economy in the future.

"People will tend to hold back consumption to be on guard if this turmoil continues to the level above Rp. 17,000. As a result, purchasing power will decline," he continued.

Similarly, Rahma also said that the surge in prices due to the inflation of imported goods could suppress people's purchasing power, especially the lower middle class whose purchasing power has continued to be eroded in recent years.

The results of the National Socio-Economic Survey (Susenas) by BPS showed that the number of middle classes decreased by 9.48 million people, from 57.33 million people in 2019 to 47.85 million people in 2024. The rate of decline is higher than the period 2018-2023 by 8.5 million people.