Indonesian Middle Class Decreases, Banggar Chair: Even Though They Move Domestic Consumption

Rupiah (Photo: Antara)

JAKARTA - Chairman of the DPR's Budget Agency (Banggar) Said Abdullah said that Indonesia's economic growth depends on domestic consumption, therefore the government must take part in protecting and paying attention to the middle class in supporting economic growth.

Economic growth is always dependent on domestic consumption, but it is threatened with a decline in the Indonesian middle class. Since six years ago, our middle class has fallen by 8 million people. Even though they are actually the driving class for domestic consumption," Said said in a Banggar meeting with the Government, Tuesday, August 27.

As for the 2025 State Budget Draft (RAPBN), the government targets economic growth in 2025 at 5.2 percent.

According to Said, from 2015 to 2023 Indonesia has only once exceeded economic growth above the target, namely in 2022, which is 5.31 percent.

Said said that Indonesia is facing structural problems so that it is a factor that makes it difficult for Indonesia to achieve the economic growth target, namely a high-cost economy due to licensing and corruption, legal uncertainty, to the quality of human resources (HR) that have not been skilled, inter-regional connectivity has not been well established, and decreased democracy.

We have discussed these various problems for a long time. However, it seems that there is not enough energy to completely get out of this problem," he said.

Therefore, Said encouraged the government to be more progressive in solving structural problems that have long hampered economic growth.

Said said, based on the 2045 Indonesia Vision document, at least 5.4 percent to 6 percent of economic growth is needed to achieve Indonesia's 2045 gold vision.

So, according to Said, the government focuses on domestic consumption that needs to be maintained along with low controlled inflation, incoming investment must be able to create new jobs, as well as provide added value to export products.

At least we need a minimum investment contribution of 1.5 percent, and 0.5 percent of exports as contributors to economic growth every year. Thus, the backbone of demand is not just domestic consumption," he said.