Indonesia to Revise National Poverty Lines

TEMPO.CO, Jakarta - National Economic Council member Arief Anshory Yusuf announced that the process of revising Indonesia's national poverty standards is currently underway. The Central Statistics Agency (BPS) has been using the same poverty calculation methodology since 1998. Arief mentioned that the study to develop a new method has been ongoing for several months.

"For the past six months, I have been working with colleagues at the National Development Planning Agency (Bappenas), as well as with the World Bank, and also communicating with BPS to revise it as soon as possible, so the process has started," Arief told Tempo on Sunday, June 8, 2025.

He stated that the revision process must be completed this year. This urgency stems from Indonesia's current poverty line nearing the extreme poverty threshold set by the World Bank, despite Indonesia being classified as an upper-middle-income country.

The World Bank recently raised its international poverty line from the previous US$2.15 per capita per day to US$3.00 per capita per day. For lower-middle-income countries, the poverty line has been revised from US$3.65 to US$4.20 per capita per day, while the poverty line in upper-middle-income countries has changed from US$6.85 to US$8.30 per capita per day. One of the factors triggering these changes was an increase in the national poverty lines of 16 low-income countries.

Unlike BPS, the World Bank uses the purchasing power parity (PPP) approach, a conversion method that adjusts purchasing power between countries. The new poverty line adopted by the World Bank utilizes PPP 2021, as opposed to the previously used PPP 2017.

According to Arief, when calculated using the latest PPP, the international poverty line is approximately Rp545,000 per person per month, while Indonesia's current poverty line is around Rp595,000 per person per month. Ideally, he suggested, the national poverty line should be in the range of Rp750,000 to Rp1.5 million, based on the lower-middle-income and upper-middle-income poverty thresholds.

When measured using the latest upper-middle-income poverty line, Indonesia's poverty rate in 2024 reached 68.25 percent, equivalent to 193.49 million people. Meanwhile, using the international poverty line, approximately 15.42 million people, or 5.5 percent, are living below the poverty line.

In contrast, based on the current national poverty line, the Central Statistics Agency (BPS) recorded Indonesia's poverty rate as of September 2024 at 8.57 percent, or around 24.06 million people. BPS itself employs the cost of basic needs approach, which defines the minimum amount of rupiah required to meet basic necessities.

The economist from the University of Padjadjaran warned that if the national poverty line is not updated, it will have implications for the direction of economic policy. "If our economic policies are influenced by false information, that our poverty rate is already low, our policies will not be proper," he asserted. He added that the public might also feel marginalized because the data would not reflect their experiences on a daily basis.

Editor's Choice: Extreme Poverty in Indonesia Rises to 15.42 Million

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