Understanding the Differences in Poverty Rates Reported by the World Bank and Statistics Indonesia (BPS)

Jakarta, May 1 – In early April 2025, the World Bank, through its Macro Poverty Outlook, reported that more than 60.3 percent of Indonesia’s population in 2024—equivalent to approximately 171.8 million people—were living below the poverty line. Meanwhile, official figures from Statistics Indonesia (BPS) stated that Indonesia’s poverty rate as of September 2024 was 8.57 percent, or about 24.06 million people. While the difference between these two figures appears stark, it is important to recognize that they do not contradict one another. Instead, the discrepancy stems from the use of different poverty lines and methodologies, which are based on varying standards and objectives.

The World Bank uses three internationally standardized poverty thresholds to monitor global poverty and facilitate cross-country comparisons. These include a threshold of US$2.15 per person per day for measuring extreme poverty, US$3.65 for lower-middle-income countries, and US$6.85 for upper-middle-income countries. These benchmarks are calculated in terms of purchasing power parity (PPP), a method that adjusts for differences in cost of living between countries. As such, the dollar values used are not based on current exchange rates but on purchasing power equivalence. In 2024, US$1 PPP was equivalent to IDR 5,993.03.

Indonesia’s 60.3 percent poverty rate was derived using the US$6.85 PPP threshold, which is based on the median poverty line of 37 upper-middle-income countries and does not reflect the specific cost of basic needs in Indonesia. The World Bank itself advises countries to establish their own national poverty lines, tailored to local socioeconomic and cultural contexts.

Although Indonesia is currently categorized as an upper-middle-income country, with a Gross National Income (GNI) per capita of US$4,870 in 2023, the country only recently transitioned into this classification and remains close to the lower threshold of the income range, which spans from US$4,516 to US$14,005. Consequently, when global poverty standards such as those from the World Bank are applied to Indonesia, the resulting figures tend to show a higher proportion of the population as poor.

In contrast, BPS uses a cost of basic needs (CBN) approach to determine poverty levels in Indonesia. This approach calculates the poverty line based on the minimum amount of money required to meet both food and non-food basic needs. The food component is designed to provide a minimum of 2,100 kilocalories per person per day and is constructed from commonly consumed household items such as rice, eggs, tofu, tempeh, cooking oil, and vegetables, in line with Indonesian consumption patterns. The non-food component includes essential expenditures for housing, education, health care, clothing, and transportation.

The poverty line is calculated based on data collected through the National Socio-Economic Survey (Susenas), which captures information on household expenditures and consumption patterns. The Susenas is conducted twice a year. In 2024, the March survey covered 345,000 households across the country, while the September survey sampled 76,310 households. Unlike the World Bank’s per capita approach, BPS measures poverty at the household level, acknowledging that expenditures and consumption typically occur collectively within families.

This methodology allows the resulting poverty line to reflect the actual living costs of the Indonesian population more accurately. Furthermore, BPS calculates and publishes poverty statistics at both provincial and district levels, distinguishing between urban and rural areas. As of September 2024, Indonesia’s national per capita poverty line was recorded at IDR 595,242 per month. However, since consumption occurs at the household level, it is more meaningful to consider the household poverty line, which, based on the national average household size of 4.71 members, amounts to IDR 2,803,590 per month. Poverty thresholds vary by province, reflecting differences in cost of living, living standards, and consumption patterns across provinces. For example, the household poverty line in Jakarta was IDR 4,238,886, in East Nusa Tenggara IDR 3,102,215, and in Lampung IDR 2,821,375.

It is important to interpret poverty lines with caution. The poverty line represents an average threshold and does not account for individual characteristics such as age, gender, or occupation. It would be misleading, for instance, to assume that all members of a household require identical expenditures. In Jakarta, the per capita poverty line in September 2024 was IDR 846,085 per month. If a household consists of five people—two parents and three young children—it would be inaccurate to conclude that each person’s needs are the same. Since consumption happens collectively, it is more appropriate to use the household poverty line, which in this case would be IDR 4,230,425 per month. This figure provides a more realistic reflection of the household’s socioeconomic condition.

Understanding the correct concept of the poverty line is essential. Poverty cannot be simplistically defined as earning less than IDR 20,000 per day per person; and it cannot be concluded that someone earning Rp20,000 per day is not considered poor. That would be an oversimplification.

Furthermore, individuals living above the poverty line are not necessarily well-off or economically secure. Above the poor, there exists a spectrum of economic classes, including the vulnerable poor (those with income 1.0 to 1.5 times the poverty line), the aspiring middle class (1.5 to 3.5 times), the middle class (3.5 to 17 times), and the affluent (17 times and above). As of September 2024, Indonesia’s population consisted of 8.57 percent poor (24.06 million people), 24.42 percent vulnerable poor (68.51 million), 49.29 percent aspiring middle class (138.31 million), 17.25 percent middle class (48.41 million), and 0.46 percent affluent (1.29 million).