JAKARTA — The World Bank’s latest Macro Poverty Outlook report, published in April 2025, states that 60.3% of Indonesia’s population—around 171.8 million people—were still living below the poverty line by the end of 2024.

Although it slowed down from 61.8% seen in 2023, this figure still contrasts sharply with data from Statistics Indonesia (BPS), which recorded a national poverty rate of just 8.57%, or approximately 24.06 million people, as of September 2024.

The significant discrepancy stems from differing measurement methodologies used by the two institutions.

The World Bank applies the international poverty line based on Purchasing Power Parity (PPP), a conversion method that adjusts for differences in cost of living across countries. It uses different poverty thresholds for different income classifications.

Indonesia, now classified as an upper-middle-income country with a Gross National Income (GNI) per capita of USD 4,870, falls under a threshold of USD 6.85 PPP per day.

This USD 6.85 standard is derived from the median poverty line across 37 countries in the same income bracket. However, BPS highlights that the GNI range within this group is quite broad, from USD 4,516 to USD 14,005.

“Therefore, if the World Bank’s global poverty standard is applied, the number of people classified as poor would be considerably high,” BPS explained in an official release.

Regionally, Indonesia’s poverty rate based on the World Bank’s standard is better than Laos (68.5%) but lags behind countries such as Malaysia (1.3%), Thailand (7.1%), and even the Philippines (50.6%).

Nonetheless, the World Bank projects Indonesia’s poverty rate to gradually decline to 58.7% in 2025, 57.2% in 2026, and 55.5% in 2027.

In contrast, BPS uses the Cost of Basic Needs (CBN) method to measure poverty domestically.

The poverty line is defined by the minimum expenditure required to meet both food and non-food needs, including education, housing, and transportation. This is assessed at the household level.

“Not at the individual level, since consumption and spending in real life typically happen collectively,” BPS said in its statement.

As of September 2024, the national poverty line per capita stood at IDR 595,242 per month. With the average Indonesian household comprising 4.71 members, this translates to a household poverty line of IDR 2,803,590 per month.

This threshold varies across regions. For instance, Jakarta’s poverty line was IDR 4,238,886, compared with IDR 3,102,215 in East Nusa Tenggara and IDR 2,821,375 in Lampung.

BPS also noted that beyond the 8.57% classified as poor, a further 24.42% were considered vulnerable to poverty, 49.29% were potential middle class, and only 0.46% qualified as wealthy. (EF/ZH)