Istimewa
THE 2025 calendar has closed. Bankers face 2026 with trepidation. The year of the Fire Horse is said to ignite courage, passion, and the potential for major leaps. But if the Indonesian economy were likened to a horse, it appears to be struggling and exhausted.
The primary cause is the collapse in purchasing power due to a shrinking middle class and limited formal employment opportunities. The middle class, the driver of consumption, has shrunk by 9.48 million people, from 57.33 million in 2019 to 47.85 million in 2024. The manufacturing sector, particularly labour-intensive ones, which are key to employment, continues to be battered by layoffs. The number of layoffs in 2024, which reached 77,965, continues to rise, with the number of workers affected by layoffs reaching 79,302 from January to November 2025. The limited employment opportunities have left Indonesia besieged by informal businesses.
