Economy Grows 5.29%, Poverty Falls, But Why Hasn't Public Purchasing Power Recovered?

The decline in the poverty rate has brought encouraging news amid Indonesia’s economic growth of 5.29 percent in the second quarter of 2026. However, several indicators show that this improvement has not yet fully reflected an increase in public welfare.

Statistics Indonesia (BPS) recorded that the number of poor people fell to 22.93 million in March 2026, or 8.07 percent of the total population. Compared to September 2025, the number of poor people decreased by around 430,000 from 23.36 million, or 8.25 percent.

BPS Deputy for Balance Sheet and Statistical Analysis Edy Mahmud stated that the decline in poverty occurred in almost all regions of Indonesia. The deepest decline occurred in Java, at 0.21 percentage points. Nevertheless, Java remains the region with the largest concentration of poor people, reaching 12.02 million people or 52.42 percent of the national total.

BPS also noted that the national poverty line increased to IDR 669,235 per capita per month in March 2026, up 4.33 percent from IDR 641,443 per capita per month in September 2025. The rise in the poverty line indicates that the minimum requirement for the community to meet basic needs continues to increase.

Conditions in rural areas have not fully improved. The Poverty Depth Index (P1) and Poverty Severity Index (P2) actually increased in these areas. This means that some of the poor in villages are facing heavier economic pressures compared to six months earlier.

On the other hand, the government believes that various social protection programmes are beginning to yield results. The Ministry of Social Affairs recorded that 132,272 beneficiary families graduated or exited from social assistance status in the third quarter of 2026 because they were deemed to have become economically self-reliant.