Jakarta, ThedailyID — Strengthening quality job creation has become critical to sustaining Indonesia’s middle class resilience, as economic pressures continue globally (April 8, 2026).
Data from Mandiri Institute shows that household consumption contributes around 54 percent of Indonesia’s gross domestic product (GDP). This makes it a key buffer against external shocks.
However, the report highlights growing risks within the country’s economic structure. Around 86 million Indonesians, or one in three people, now fall into the Transitional Middle Class category.
This group includes the Upper Aspiring Middle Class and Lower Middle Class. Both groups show high mobility but remain financially vulnerable.
According to Andry Asmoro, shifts within this group present a major challenge.
“Indonesia must ensure people in this transition zone have enough momentum to move into a more stable economic level,” he said.
Between 2019 and 2025, the Lower Middle Class group shrank by more than 11 million people. Meanwhile, the Upper Aspiring Middle Class has remained largely stagnant below the middle-class threshold.
In contrast, the more established middle class has grown, although only by around 416,000 people. This imbalance signals uneven upward mobility.
Job quality plays a decisive role in this gap. While more than 50 percent of the transitional group works in the formal sector, the figure still lags far behind established middle-class levels by 28 percentage points.
As a result, many households struggle to build assets and remain exposed to economic shocks.
Spending patterns reflect this pressure. Households in the transitional group allocate most of their income to essential needs. Transportation accounts for 20 percent, housing 13 percent, and routine bills 10 percent.
Meanwhile, spending on health and education reaches only 15 percent. Discretionary spending remains limited at around 18 percent.
Limited income also affects asset ownership. Only 21 percent of Upper Aspiring Middle Class households hold liquid assets such as gold. This compares sharply with 69 percent among higher middle-class groups.
Without sufficient financial buffers, many remain vulnerable to inflation and income loss.
Mandiri Institute estimates that more than 2 million people in the transitional group are ready to move up economically. However, they need stable and higher-quality jobs to sustain that progress.
“Expanding job opportunities must go hand in hand with improving worker productivity,” Asmoro said. “This is key to increasing real income sustainably.”
To address this, policymakers need to improve investment competitiveness and ease of doing business. Fiscal support can also help expand productive sectors and create more quality jobs.
As a strategic partner to the government, Bank Mandiri continues to support financial inclusion and literacy programs. These efforts aim to help transitional households manage finances and build productive assets for long-term stability.
