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Wealth gap narrows in Indonesia as stock market slumps, house prices grow
The richest 10 percent held around two-thirds of wealth last year, down from 74.1 percent in 2019, according to the latest global wealth report from Swiss investment bank Credit Suisse.
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A commuter train stops at Cisauk Station, which is part of the Cisauk BSD City Intermodal area in Tangerang, Banten, on June 19, 2019. The area integrates a train station, a bus terminal, the BSD City modern market and apartment buildings. It was developed by PT Kereta Api Indonesia (KAI), the Tangerang regency administration and private companies. (The Jakarta Post/Dhoni Setiawan)
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ealth inequality in Indonesia fell during the first year of the pandemic as the rich earned less from the stock market and the wealth share of adults in the middle and poorest groups expanded amid shrinking debts.
The richest 10 percent held around two-thirds of wealth last year, down from 74.1 percent in 2019, according to the latest global wealth report from Swiss investment bank Credit Suisse. At the same time, the wealth share of adults in the middle expanded to 2.2 percent from 1.5 percent. The portion of wealth held by the poorest 40 percent also expanded slightly.
The latest shift in wealth distribution brought Indonesia’s Gini ratio down to 0.777 last year from 0.833 in 2019, the lowest level since 2011. A Gini figure below 0.7 is considered low and one above 0.8 is high by global standards, according to the report.
The Gini ratio for wealth inequality is far higher than that for both income and expenditure inequality. For inequality of expenditure, for example, the Gini figure was 0.385 in September last year, up 0.004 from a year earlier, Statistics Indonesia (BPS) reported.
“Wealth is more unequal because expenditure does not account for savings. The rich have large savings but spend less, while the poor barely have savings,” Arief Anshory Yusuf, a professor of economics at Padjadjaran University in West Java, told The Jakarta Post in a phone interview.
Read also: Indonesia’s ultra rich to increase in number by 57% by 2024
