May 11, 2026
JAKARTA – Indonesia has officially entered the phase of an aging population, which spells trouble for economic development if the country fails to make use of its remaining demographic dividend.
The 2025 Intercensal Survey (SUPAS) published by Statistics Indonesia (BPS) on Tuesday shows that the percentage of the elderly population has climbed to 11.97 percent, breaching for the first time the 10-percent threshold used to differentiate between a young population and an aging one.
BPS head Amalia Adininggar Widyasanti told The Jakarta Post on Thursday that the threshold was defined in reference to the United Nations Department of Economic and Social Affairs. The body, and a 1998 Indonesian law, define elderly as anyone aged 60 or above.
The elderly population share has continued to climb in the survey conducted every five years, from 7.59 percent in 2010 to 8.47 and 9.93 percent in the subsequent surveys, before reaching the current level.
Amalia revealed that Indonesia’s population, recorded at 284.67 million in 2025, had grown at an average 1.08 percent per year over the survey’s five-year horizon. The number is the result of births and deaths as well as migration into and out of the country.
The total fertility rate (TFR) has gradually declined from 2.41 in 2010 to 2.13 last year, inching ever closer to what is known as the replacement level, generally cited as 2.1 children per woman, which is the level generally required for a population to replace itself from one generation to another without migration.
Countries with a severe population decline, like South Korea, China and Japan have TFRs around 0.8, 1.02 and 1.2, respectively.
Many countries are experiencing an aging population, which hurts economic growth as the workforce shrinks while straining public finances through increased spending on health care and pensions.
Indonesia’s productive age population – those between 15 and 64 years of age – reached a peak of 69.28 percent in 2020, and has since inched down to 68.94 percent, as of 2025.
The percentage of young people, below 15 years, has steadily declined over the past 15 years, while the count of elderly gradually increased.
Data compiled by the National Development Planning Agency (Bappenas) for BPS in 2020 projects that trend will continue until the productive age share drops below two thirds of the population in 2045.
That happens to be the year the government has set for Indonesia to become a developed economy, a goal that relies significantly on the country’s demographic dividend, or a large productive age population share, which creates opportunities for fast economic growth.
Maliki, undersecretary for community empowerment, population and manpower affairs at Bappenas, told the Post on Friday that the door to reaching the 2045 goal was still open, but “the window to capitalize on the demographic dividend is narrowing” given that the population had begun aging.
He cautioned, however, that the working age population alone was of little importance from a development viewpoint, because “what’s more important is the ability of the productive population to generate high economic output and productivity”.
Maliki also highlighted a metric called age dependency ratio, which depicts the economic burden on the productive population and has been declining from 2010 to 2020 but has begun to climb back up in 2025 as the productive population started to shrink.
The archipelago’s age dependency ratio was 45.05 last year, meaning every 100 working people were economically carrying 45 people of the nonproductive ages.
Another dimension of the problem lies in Indonesia’s labor structure, namely the fact that 60 percent of the workforce is employed in the informal sector; where most pay no income tax and have no pension scheme.
Only about 9 percent of elderly people currently rely on pensions, with the overwhelming majority, almost half of them, living on family handouts and 38 percent still working, mostly informally. Only 1 percent cling onto investments and savings for their old age.
Permata Bank chief economist Josua Pardede told the Post on Friday that Indonesia might eventually face the structural problem Germany is experiencing today, where the pension fees cut from workers’ pay can no longer cover the growing elderly population.
The German government has resorted to pension subsidies to deal with the problem, with no clear fiscal way out.
Josua pointed out that the risks in Indonesia were different, because Germany’s pension coverage was wide, with most elderly people accounted for. He said Indonesia’s fiscal burden was not close to that of Germany, “but the early signs are there”.
“Indonesia is instead facing a double risk where, on the one hand, pension coverage is still small, so many elderly are at risk of poverty, and on the other hand, if the government expands elderly assistance without a strong revenue basis, the state’s fiscal burden would increase sharply,” said Josua, arguing that Indonesia’s situation “could be more complicated” than Germany’s.
Syafruddin Karimi, an economics professor at Andalas University, told the Post on Friday that Indonesia saw the aging population coming and had anticipated it, “but the socioeconomic pressure could grow faster than public policy can prepare for”.
He said that, should the country fail to deal with the informal sector problem, the workers of today would become a new, older vulnerable group that ultimately would result in a higher fiscal burden.
“Without a change of strategy, 2045 will turn from the [envisioned] Golden Indonesia to a severe test of population aging,” said Syafruddin.