1. Context & Key Update
In June 2025, the World Bank issued a significant revision to its global and national poverty estimates via its Poverty & Inequality Platform (PIP). This included incorporating new 2021 Purchasing Power Parities (PPPs), updated national poverty lines, and additional household survey data .
The international extreme poverty threshold rose from $2.15/day to $3.00/day based on these updates.
For lower-middle-income countries, the poverty line increased to $4.20/day; for upper-middle-income countries (like Indonesia), it rose to $8.30/day .
2. Implications for Indonesia
Indonesia, which was reclassified as an upper-middle-income country in 2023, now falls under the new $8.30/day threshold. Applying this benchmark to Indonesia’s estimated population of 285 million, results show that approximately 68.2% or around 194 million people are considered poor under his updated metric .
In contrast, Indonesia’s own national poverty line (CBN method) by BPS in September 2024 reported a poverty rate of 8.57% (~24 million individuals), with an additional vulnerable population of ~68 million .
3. Why the Big Jump?
The drastic increase is due to:
Revised PPPs: New price comparison data reflecting updated living costs in Indonesia and other countries .
Higher poverty thresholds: With Indonesia now in upper-middle-income territory, the reference line is more than triple the global extreme poverty standard .
Improved national data: More recent and accurate household surveys feeding into revised poverty lines .
4. Broader Implications
Global Perspective: Applying the $8.30/day benchmark means 3.8 billion people worldwide were poor in 2022 under upper-middle-income standards .
Policy Considerations: While the new estimate paints a stark picture, it highlights broader questions about vulnerability, well-being, and inequality not just income but also access to services and opportunities.
National vs International Lines: Indonesia's official 8.57% poverty rate is a more targeted, norms-based measure (food/non-food needs), while the World Bank’s figure reflects a broader, global standard of welfare alignment.
5. Reading Between the Lines
The revision doesn't mean Indonesians suddenly became poorer; rather, they’re now evaluated under a higher international benchmark.
This shift calls for renewed policy focus: even middle-income citizens face financial fragility by international standards—emphasizing welfare systems, social protection, and inclusive growth strategies.
It also underscores methodological progress: better surveys and more accurate data help refine our understanding of poverty globally .
▶️ Summary
Measure Poverty Line Estimated Population
World Bank (upper-middle-income) $8.30/day 194 million (68.2%)
BPS national line (CBN-based) 24 million (8.57%)
This divergence illustrates how definitions shape poverty statistics. The World Bank’s broader lens signals substantial vulnerability, even within Indonesia’s expanding middle class, while national metrics focus on acute deprivation.