Indonesian Citizens Continue to Eat into Savings, DPR: Middle Class Still Needs Assistance

Jakarta, CNBC Indonesia - The Chairman of Commission XI of the DPR, Mukhamad Misbakhun, believes that the government still needs to maintain the purchasing power of the middle class, particularly the vulnerable middle class who are still relying on their savings to survive.

He stated that the ongoing phenomenon of the middle class declining is a sign that the government must not abandon stimulus for vulnerable groups or the middle class, such as in the form of social assistance.

“One thing we are observing is the reduction in the middle class group. At certain levels, the government has 10 deciles of societal groups. In certain deciles, we provide social assistance. In certain deciles, these vulnerable groups apparently do not receive support,” said Misbakhun on the CNBC Indonesia TV programme in Jakarta, quoted on Tuesday (28/4/2026).

“So what? They are steady, eating into savings, so the number of bank deposits for certain societal groups is being eroded for consumption,” he emphasised.

Referring to the Mandiri Institute study titled Demographic Insight: Dynamics of the Middle Class in 2025, the decline in the middle class continued until last year.

The Mandiri Institute recorded that the number of middle class individuals in 2025 had fallen by 1.1 million people, to 46.7 million. The number of middle class individuals downgrading to the aspiring middle class category was even deeper compared to 2024, which saw 400,000 people downgrading.

This issue is accompanied by ongoing data showing people eating into their savings, including during this year’s religious holiday momentum. Based on Bank Indonesia (BI) records in March 2026, the proportion of consumer income saved (saving to income ratio) fell from 17.7% to 17.6%.

A BCA Economic & Industry Research study report also shows that the increase in consumer transactions last month was preceded by a decline in the saving rate, indicating that consumption is more supported by reducing household financial buffers rather than stronger income growth.

This is indicated by the declining share of household ownership in financial assets and mutual funds. In government securities (SBN), the share fell from 12.3% to 11.8% in March 2026. Meanwhile, in equities or shares, the share fell more sharply from 18.0% to 16.6%.

The slowdown in purchasing paper assets indicates that households are allocating more existing resources to consumption needs during Ramadan, as the BCA Consumer Spending Index reached a peak in 2026 at 132.7. This figure is higher than the 2025 Ramadan peak of 129.8 but lower than 2024’s recorded 134.2.

According to Misbakhun, this trend is a sign that the effects of the COVID-19 pandemic crisis on Indonesia’s economy have not yet ended. Therefore, he emphasised the importance of more detailed handling policies from the government to maintain public purchasing power.

Moreover, the government has issued various policies aimed at keeping prices of goods under control, with inflation pressure still managed at around 2.5% plus or minus 1% throughout last year.

“These situations are having an impact that, in my view, is still being studied by all macroeconomists. They are seeking exit strategies, ways out; what steps will policymakers take? Efforts to write off debt for micro groups and small businesses have already been done. Is continuation needed? Yes, if so, for which groups next?” said Misbakhun.