economy

BPS Explains The Reasons For Not Adopting The New World Bank Poverty Line

The Central Statistics Agency (BPS) has provided an explanation for not yet adopting the latest World Bank poverty line, which utilizes the 2021 purchasing power parity (PPP) in calculating the number and percentage of Indonesia's extreme poor population as of March 2025.

For context, the World Bank recently updated the international poverty line that serves as the standard for extreme poverty, increasing it from 2.15 US dollars (PPP 2017) to 3 US dollars per capita per day.

Ateng Hartono, Deputy for Social Statistics at BPS, explained in Jakarta on Friday that the National Medium-Term Development Plan (RPJMN) 2025-2029 still adheres to the standard of 2.15 US dollars (PPP 2017).

Nevertheless, Ateng assured that BPS has adjusted its calculation methodology in line with the improvements from the World Bank, including the application of a spatial deflator.

"We have modified the method, but we are still using the PPP from 2017, as this is related to the RPJMN 2025-2029, to ensure continuity in evaluation. Meanwhile, the World Bank only released its update last June," stated Ateng.

As of now, Indonesia has not officially adopted the 2021 PPP as a reference for the national extreme poverty level. However, BPS will continue to monitor global methodological developments, particularly concerning the measurement of extreme poverty.

"We are still using 2.15 US dollars (PPP 2017) to allow for comparisons with previous periods or years," Ateng remarked.

In March 2025, the percentage of the extreme poor, defined by the World Bank's extreme poverty line of 2.15 USD (PPP 2017) per capita per day, was recorded at 0.85 percent, equivalent to 2.38 million individuals.

The percentage of extreme poverty in March 2025 has decreased compared to September 2024, which was 0.99 percent or 2.78 million individuals, and March 2024, which stood at 1.26 percent or 3.56 million individuals.

The Central Statistics Agency (BPS) clarified that the extreme poverty figure for March 2024, previously reported as 0.83 percent, was based on the old poverty line of 1.90 USD (PPP 2011).

After adjustment using PPP 2017, the extreme poverty rate for March 2024 reached 1.26 percent. Therefore, the data for March 2025 indicates a reduction in extreme poverty compared to the same period in the previous year.

The release of this extreme poverty data aligns with the implementation of Presidential Instruction (Inpres) Number 8 of 2025 regarding the Optimization of Poverty Alleviation and the Elimination of Extreme Poverty.

As stated in the Inpres, BPS is tasked with conducting surveys and calculating the achievements in poverty alleviation and extreme poverty.

The primary data source used to calculate the poverty rate for March 2025, including extreme poverty, is the National Socio-Economic Survey (Susenans) on Consumption and Expenditure for March 2025.

The Susenans data collection for March 2025 was conducted in February 2025. This timing was chosen because March 2025 coincides with Ramadan, which may influence household consumption patterns.

The sample size for the Susenas in March 2025 consisted of 345 thousand households spread across 38 provinces and 514 districts/cities in Indonesia.

Tag: Ateng Hartono BPS World Bank