Indonesia's Poverty Rate Discrepancy: BPS vs. World Bank Amidst Different Measurement Methods

Indonesia's poverty figures present a stark contrast depending on the measuring institution, with the Central Statistics Agency (BPS) reporting a national poverty rate of 8.07 percent in March 2026, while the World Bank estimates that 64.1 percent of the population falls below the poverty line for upper-middle-income countries. Both BPS and the World Bank emphasize that this significant difference does not indicate a sudden deterioration in living conditions. The primary reason, they explain, lies in the distinct measurement methods, poverty line thresholds, and objectives of each institution. In a joint statement, both agencies confirmed they utilize data from the National Socioeconomic Survey (Susenas). However, their application of this data diverges. BPS calculates poverty based on the minimum cost required for Indonesians to meet basic needs, including food, housing, clothing, and transportation. The national poverty line set by BPS in March 2026 stood at IDR 669,235 per person per month, approximately USD 3.60 per day. This calculation, updated semi-annually to reflect price changes, uses data from 75 urban and rural areas in each province. Under this measure, Indonesia's poverty rate is projected to decrease from 8.47 percent in March 2025 to 8.07 percent in March 2026. The World Bank employs a different approach for international comparisons. Its international poverty lines are designed to compare living standards across countries based on income groups. The benchmarks are USD 3 per day for low-income countries, USD 4.20 for lower-middle-income countries, and USD 8.30 for upper-middle-income countries. These figures are based on Purchasing Power Parity (PPP), which accounts for differences in purchasing power between countries, rather than simple market exchange rates. Using the upper-middle-income threshold of USD 8.30 PPP per day, the World Bank estimates that 64.1 percent of Indonesians are below this line. This value is equivalent to approximately Rp51,087 per person per day, based on the calculation methodology used in their report. BPS and the World Bank attribute the higher poverty threshold used by the World Bank to Indonesia's reclassification into the upper-middle-income group in 2023. This upgrade automatically raises the poverty line, leading to a larger number of individuals falling below it, without implying that the population has become poorer. For global context, the World Bank's 2025 estimates indicate that 3.7 percent of Indonesians live in extreme poverty, 15.5 percent are below the lower-middle-income poverty line, and 64.1 percent are below the upper-middle-income country limit. Differences also arise in price adjustment methods. BPS adjusts its poverty line based on Indonesian consumption patterns and living standards, while the World Bank uses international standards adjusted for inflation. BPS uses its national figures to guide domestic poverty reduction policies and monitoring, whereas the World Bank's figures are primarily for international comparisons. Source: VOI English