In 2025, Indonesia's economic data presents a mixed picture. While significant progress has been made in poverty reduction, a shrinking middle class, faltering investment and growing public disillusionment signal serious problems ahead.

According to Statistics Indonesia (BPS), the middle class is shrinking at an alarming rate. By 2024, only 17.13 percent of the population, or 47.85 million people, was classified as middle class, a notable drop from 21.45 percent in 2019.

This decline signals a structural weakening of a demographic that is essential for a healthy economy, imperiling businesses and investor confidence. Without intervention, this downward spiral will only increase inequality, weaken domestic demand and dim economic prospects.

At a time when the middle class is shrinking and millions remain on the brink of poverty, the government has paradoxically increased the financial burden on citizens through higher taxes, from the established land and building tax (PBB) to newly proposed charges. At the same time, it has expanded perks for legislators.

For ordinary households already struggling with stagnant wages and rising living costs, these policies appear to reflect a growing disconnect between state priorities and public welfare. This fuels resentment and deepens the crisis of trust in democratic institutions.

Against this backdrop of economic and political discontent, the House's recent approval of increased allowances for its members was profoundly tone-deaf. Public outrage was immediate and widespread, with many calling for the legislature’s dissolution.