Differences Between BPS and World Bank Poverty Lines Explained
The difference in poverty rates between the Indonesian Central Bureau of Statistics (BPS) and the World Bank has recently become a subject of public discussion. On 5 August, BPS released a report stating the national poverty rate as of March 2026 was 8.07%. However, based on the classification for upper-middle-income countries, the World Bank estimates that 64.1% of Indonesia’s population lives below the poverty line using a standard of US$8.30 PPP, or approximately Rp51,087 per person per day.
To address this, BPS and the World Bank explained the difference in these measurements in a joint statement released on Thursday (10/9). First, regarding the reason for the differing rates, it was explained that both BPS and the World Bank utilise Indonesia’s National Socio-Economic Survey (Susenas) as their data source. However, they measure poverty differently because their objectives differ.
“BPS measures poverty based on the cost of living in Indonesia. BPS calculates the minimum expenditure required for an individual to meet food needs and other basic necessities, such as housing, clothing, and transport, across 7lan 75 urban and rural areas in every province, and updates these figures twice a year to adjust for price changes,” the statement noted. As of March 2026, this threshold was recorded at Rp669,235 per person per month, or approximately US$3.60 per day. This national poverty line is designed to provide a more accurate picture of poverty by reflecting the standards and living conditions of the Indonesian people.
Meanwhile, the World Bank uses international poverty lines to compare living standards between countries. “This requires a uniform standard, rather than a poverty line based on the prices and consumption patterns of each individual country,” it explained. The World Bank uses three international poverty benchmarks adjusted for three country income groups: US$3.00 per day for low-income countries; US$4.20 per day for lower-middle-income countries; and US$8.30 per day for upper-middle-income countries. These benchmarks are based on poverty lines commonly used by countries within each income group and are adjusted so that the same amount of money can purchase a comparable basket of goods across different nations.
“The World Bank’s poverty estimates account for three types of price dynamics: changes over time using the CPI (Consumer Price Index), regional differences (regencies/cities), and price differences between countries using Purchasing Power Parity (PPP) adjustments,” the statement clarified.
Regarding which poverty rate should serve as the reference for policy formulation and progress monitoring in Indonesia, both BPS and the World Bank believe that the national and international definitions are intentionally different because they serve different purposes. Both are appropriate for their respective uses. The national poverty line is set by the government and is specific to each country’s context, serving as the basis for national policy and monitoring progress in poverty alleviation efforts.
“To monitor Indonesia’s progress and formulate national economic and development policies, the measure set by BPS is the most relevant. Based on this benchmark, the poverty rate decreased from 8.47% in March 2025 to 8.07% in March 2026,” the statement said. For a global perspective, the World Bank’s 2025 estimate shows that 3.7% of Indonesians live in extreme poverty, or 15.5% below the lower-middle-income poverty line, or 64.1% below the upper-middle-income poverty line.
The cause of this large discrepancy, it was noted, relates primarily to the determination of the poverty line rather than a deterioration in living conditions. When Indonesia’s income level rose to upper-middle-income status in 2023, the World Bank raised its poverty threshold from US$4.20 to US$8.30 per person per day. “With a higher threshold, naturally more people fall below it. This does not mean they have become poorer,” the explanation stated. The US$8.30 figure also reflects the living standards of a broad group of upper-middle-income countries, including nations with per capita incomes nearly three times that of Indonesia. Therefore, this figure sets a higher standard than the living standards currently applicable in Indonesia.
Furthermore, the two measures treat price changes over time differently. BPS adjusts its poverty line in line with changes in consumption patterns and living standards, while the World Bank applies a fixed international standard adjusted for inflation. Consequently, both measures may show different poverty reduction trends.
In conclusion, while BPS and World Bank poverty estimates use the same base data, they answer different questions. BPS measures poverty within the Indonesian context, making it useful for domestic policy and progress monitoring. The World Bank uses international poverty lines to compare living standards between countries. In this regard, neither measure is more ‘correct’ than the other; both serve different purposes and provide complementary perspectives on poverty alleviation efforts in Indonesia.