TEMPO.CO, Jakarta - The World Bank has increased the international poverty line after adopting the 2021 Purchasing Power Parity (PPP) calculation, a change from its previous reliance on PPP 2017. PPP is a conversion method that adjusts purchasing power between countries.
Under PPP 2017, the poverty line for low-income countries was set at US$2.15 per capita per day. With PPP 2021, this has risen to US$3.00 per capita per day. For lower-middle-income countries, the PPP value 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.
Despite these increases, the World Bank stated that these figures are still very low. "This remains an extremely low bar and reflects the cost of meeting basic needs in the poorest countries of the world," as noted in the World Bank's written statement.
In its policy research document, the institution explained that the PPP change was driven by the rising poverty line in low-income countries, particularly in West Africa, resulting in "the value of the international poverty line [increasing] by about 40 percent."
This revision has altered global poverty figures. As of June 2025, the World Bank recorded 838 million people globally living below the poverty line, equivalent to 10.5 percent of the population. This marks an increase from September 2024, when the number stood at 712.8 million, or 9.0 percent, under the 2017 purchasing power parity.
This adjustment will likely impact the number of people categorized as poor in Indonesia. The World Bank's Macro Poverty Outlook, released in April 2025, reported that 60.3 percent of Indonesians were living below the poverty line in 2024 based on PPP 2017. This figure has the potential to increase if the Indonesian government were to adopt the World Bank's 2021 PPP calculation for its poverty statistics.
However, Indonesia currently uses a different standard to calculate its poor population. The Central Statistics Agency (BPS) measures the poverty line in Indonesia using the Cost of Basic Needs (CBN) approach, which calculates the minimum expenditure required to meet basic food and non-food needs.
"Therefore, the poverty line calculated by BPS can reflect the actual needs of the Indonesian people," said Amalia in an official statement on Friday, May 2, 2025.
Referring to basic needs data, BPS has determined the current national poverty line to be Rp595,242 per person per month or Rp2,803,590 per poor household. Consequently, Indonesia's poverty rate as of September 2024 was 8.57 percent, encompassing approximately 24.06 million people. These figures are considerably different from the World Bank's data.
Editor's Choice: Global Institutions Predict Indonesia's 2025 Economic Growth May Fall Below 5%
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