Alfida Rizky Febrianna, Jakarta – Indonesia's newly announced economic stimuli fail to reach its middle class as the policy mainly targets low-income households, according to an analyst.
The government recently launched five stimulus packages aimed at maintaining the national growth close to 5 percent in the second quarter. The government even set aside Rp 24.4 trillion (almost $1.5 billion) for these stimuli, a portion of the money going to hand out rice and additional staple food aid worth Rp 200,000 to the country's families in need.
The government will also roll out Rp 300,000 in monthly financial aid for 17.3 million workers who earn less than Rp 3.5 million a month or whose income is below the provincial minimum wage. However, Esther Sri Astuti, a senior economist at the think-tank Indef, said that the nature of these stimuli shows that the government is only focusing on low-income households, thus ignoring the country's middle class.
"I doubt these packages are effective enough to boost people's purchasing power.... Just take a look at the income subsidies. What can we buy with just Rp 300,000? The social aid may also only be enough for the low-income households. I doubt the middle and upper classes do not need it," Esther said on Monday.
An economic policy that is too centered on the low-income households can lead to a shrinking middle class. In other words, more Indonesians might fall into the low-income status. Such a trend has also been occurring over the past five years, according to Esther. She said: "The government must not forget about Indonesia's middle class."
Aside from the aforementioned stimuli, the government is also rolling out discounts for tollways and certain modes of transportation (e.g., plane and train tickets). The government has extended the 50 percent discount on occupational accident insurance premiums for six months.
The middle class and those nearing middle-class status represented almost 66.4 percent of Indonesia's total population as of 2024, the Central Statistics Agency (BPS) reported. Both groups also made up nearly 81.5 percent of the country's household spending.