Middle Class Potentially Supports Global Economy, Coordinating Ministry For The Economy Says It Needs Special Attention

Deputy for Macroeconomic Coordination & Finance at the Coordinating Ministry for the Economy Ferry Irawan. (Photo: Doc. ANTARA)

JAKARTA - Deputy for Macroeconomic Coordination & Finance at the Coordinating Ministry for the Economy Ferry Irawan assessed that the middle class, especially those in Asia, have the potential to support the global economy so that they need to get more attention.

"This middle class is an engine of economic growth. Not only for us but also for outside countries. This is what is interesting again for this middle class, especially those in Asia, will become the backbone of global economic growth," Ferry said at the Merdeka Barat 9 Forum virtually, Monday, September 9.

Ferry conveyed that to solve the problem of decreasing purchasing power in the middle class, the government has set a profile for the needs of each middle and middle to lower class community in accordance with their work and primary needs.

As for the lower middle class, the government continues to provide various programs such as Social Protection (Perlinsos), Family Hope Program (PKH), Basic Food Card Program, to Village Fund Direct Cash Assistance.

Meanwhile, for the weakening of the purchasing power of the middle class, the government provides assistance through subsidy incentives in the property sector.

Ferry said the government had extended the Government-Borrowed Value Added Tax (PPN DTP) incentive and added the quota for subsidies for Housing Financing Liquidity Facilities (FLPP).

Meanwhile, the property DTP VAT incentive will be 100 percent until December 2024 from the previous 50 percent for the second semester of 2024.

Then, the FLPP quota target will be 200 thousand units starting September 1, 2024, from the previous 166,000 units.

"If you look at the middle class, based on BPS data, the characteristics (needs) for investment, of course education, then housing, transportation are of course in addition to food. Food remains the largest component, but maybe the middle class has a share not as big as the lower middle class," he explained.

In addition, Ferry conveyed that for people who work in the field of entrepreneurship, the government has expanded access to financing through People's Business Credit (KUR).

The Coordinating Ministry for Economic Affairs noted that the realization of People's Business Credit (KUR) had reached Rp90.45 trillion as of April 30, 2024.

"This year we have allocated, at least around Rp. 280 trillion for People's Business Credit which we have given to our friends who want and can do business. We hope that by the end of the year we can achieve this," he said.

Ferry added that the government has also prepared a policy if the middle class loses their jobs, namely the Job Loss Guarantee (JKP) program.

"We have a job loss guarantee. The form is financial compensation and training support for workers who have lost their jobs. So this is what we hope will be a kind of buoy," he said.