BPS and the World Bank: National and International Poverty Lines

Jakarta (10/9)—On August 5, BPS released a report stating that the national poverty rate as of March 2026 stood at 8.07%. Meanwhile, based on the upper-middle-income country classification, the World Bank estimates that 64.1% of Indonesia's population lives below the poverty line defined by a standard of US$8.30 PPP—or approximately Rp51,087—per person per day. Explanations regarding the poverty figures from both BPS and the World Bank are provided below.

Why do the poverty rates reported by BPS and the World Bank differ?

Both BPS and the World Bank use Indonesia’s National Socio-Economic Survey (SUSENAS) as their data source, yet they measure poverty differently because their measurements serve distinct purposes. BPS measures poverty based on the cost of living in Indonesia. It calculates the minimum expenditure required for an individual to meet food needs and other basic necessities—such as housing, clothing, and transportation—across 75 urban and rural areas in each province, updating these figures twice a year to account for price changes. As of March 2026, this threshold stood at Rp669,235 per person per month, or approximately US$3.60 per day. This national poverty line is designed to provide a more accurate picture of poverty by reflecting the living standards and conditions of the Indonesian population. The World Bank employs international poverty lines to compare living standards across countries. This requires a uniform standard rather than poverty lines based on each country's specific prices and consumption patterns. The World Bank uses three international poverty benchmarks tailored to three country income groups: US$3.00 per day (equivalent to Rp18,465 per day) for low-income countries, US$4.20 (Rp25,851 per day) for lower-middle-income countries, and US$8.30 (Rp51,087 per day) for upper-middle-income countries. These benchmarks are based on poverty lines commonly used by countries within each income group and are adjusted so that the same amount of money can purchase a comparable basket of goods across different nations. The World Bank’s poverty estimates account for three types of price dynamics: changes over time using the Consumer Price Index (CPI), differences across regions (regencies/cities), and price differences between countries using adjustments based on Purchasing Power Parity (PPP). Which poverty level should serve as the benchmark for policy formulation and progress monitoring in Indonesia?

National and international poverty definitions are intentionally distinct because they serve different purposes, and each is appropriate for its specific use. The national poverty line is established by the government and is specific to each country's unique context. This line serves as the basis for national policy and for monitoring progress in poverty alleviation efforts. To monitor Indonesia's progress and formulate national economic and development policies, the measure established by BPS (Statistics Indonesia) is the most relevant. Based on this benchmark, the poverty rate fell from 8.47% in March 2025 to 8.07% in March 2026. From a global perspective, World Bank estimates for 2025 indicate that 3.7% of Indonesia's population lives in extreme poverty; 15.5% fall below the poverty line for lower-middle-income countries; and 64.1% fall below the poverty line for upper-middle-income countries.

What accounts for such significant differences?

These substantial differences stem primarily from how the poverty lines are determined, rather than from a deterioration in living conditions. When Indonesia’s income status rose to that of an upper-middle-income country in 2023, the World Bank raised its applicable poverty threshold from US$4.20 to US$8.30 per person per day. A higher threshold naturally results in more people falling below it; this does not mean they have become poorer. The US$8.30 figure reflects living standards across the broad upper-middle-income country group, which includes nations with per capita incomes up to nearly three times that of Indonesia. Consequently, this figure sets a higher standard than the living standards prevailing in Indonesia. The two measures also treat price changes over time differently. BPS adjusts its poverty line in line with changing consumption patterns and living standards, whereas the World Bank applies a fixed international standard and adjusts it for inflation. Consequently, the two measures may show differing trends in poverty reduction.

What do these poverty figures actually indicate?

Poverty estimates from BPS and the World Bank utilize the same underlying data but address different questions. BPS measures poverty within the Indonesian context, making it useful for monitoring domestic progress and policy. The World Bank employs an international poverty line to compare living standards across countries. In this regard, neither measure is more "correct" than the other; they serve different purposes and offer complementary perspectives on efforts to.

Narahubung Media Favten Ari Pujiastuti

Kepala Biro Umum dan Humas Badan Pusat Statistik

[email protected]

Lestari Boediono

Senior External Affairs Officer World Bank Group Indonesia and Timor Leste

[email protected]