Erfan Maruf, Heru Andriyanto, Jakarta – The Indonesian government is preparing a new method for calculating the national poverty line in response to recent adjustments made by the World Bank in its June 2025 Update to the Poverty and Inequality Platform (PIP).
Chair of the National Economic Council, Luhut Binsar Pandjaitan, confirmed on Friday that the updated calculation is being finalized before being submitted to President Prabowo Subianto. The move comes amid stark differences between official data from Indonesia's Central Statistics Agency (BPS) and poverty figures published by the World Bank.
"This revision doesn't indicate anything negative. It's simply a matter of ensuring our poverty data is accurate. There's nothing unusual about this," Luhut said.
Asked whether the new method could lead to a higher poverty count, Luhut urged the public not to overreact. He stressed that government initiatives such as the Free Nutritious Meals (MBG) program and food security policies would help address poverty structurally.
"We're reviewing this comprehensively, and BPS is in close discussion with us. So there's no need to be alarmed. Hopefully, if the President agrees, these new figures reflecting the actual situation can be included in his address," Luhut added. The revised poverty data is expected to be released later this year.
In April, the World Bank's Macro Poverty Outlook reported that 60.3 percent of Indonesians – equivalent to 171.8 million people – lived below the poverty line in 2024. In contrast, BPS data for September 2024 showed an official poverty rate of just 8.57 percent, or approximately 24.06 million people.
The wide gap stems from differences in methodology and the purpose of measurement. The World Bank uses three global poverty thresholds:
- $2.15 per capita per day for extreme poverty
- $3.65 per capita per day for lower-middle-income countries
- $6.85 per capita per day for upper-middle-income countries
As Indonesia is now classified as an upper-middle-income country, the $6.85 threshold was used in the World Bank's assessment. The figure is based on purchasing power parity (PPP), not the prevailing market exchange rate. In 2024, $1 PPP was equivalent to Rp 5,993 in Indonesia.
BPS noted in its analysis released on May 2 that each country is encouraged to develop its own National Poverty Line, tailored to local economic and social conditions.
Indonesia's Gross National Income (GNI) per capita stood at $4,870 in 2023, just above the lower threshold for upper-middle-income countries, which ranges from $4,516 to $14,005. BPS cautioned that applying the World Bank's global poverty standards could result in a significantly higher poverty count due to this narrow margin.
BPS currently uses the Cost of Basic Needs approach to define poverty, which calculates the minimum monthly expenditure required to meet both food and non-food essentials such as housing, education, healthcare, clothing, and transport.
As of September 2024, the national poverty line was set at Rp 595,242 per capita per month. However, since poverty is assessed at the household level, BPS notes that the average poor household consists of 4.71 members, resulting in an average household poverty threshold of Rp 2,803,590 per month.
Poverty thresholds vary by region due to differences in living costs and consumption patterns. For example, the household poverty line in Jakarta stood at Rp 4,238,886, in East Nusa Tenggara at Rp 3,102,215, and in Lampung at Rp 2,821,375.