Homi Kharas is chief economist and co-founder of World Data Lab. He was previously the World Bank's chief economist for East Asia and the Pacific, and is author of "The Rise of the Global Middle Class." Wolfgang Fengler is CEO and co-founder of World Data Lab, and was previously the World Bank's senior economist for Indonesia.
A Financial Times article published on Feb. 16 entitled "Indonesia's shrinking middle class rattles businesses betting on a boom" claimed, based on government data, that the number of Indonesians in the middle class shrank by 12 million people between 2018 and 2024. This is dramatic -- it represents a quarter of the 48 million people currently in the Indonesian middle class, according to the article. Corroborating stories of the closure of Pizza Hut franchises and falling car sales are provided to strengthen the argument.
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