World Bank Changes Poverty Line Standards, Number Of Poor People In Indonesia Increases To 194.6 Million

The World Bank has changed the calculation of the standard poverty line and inequality as of June 2025. Due to this change, Indonesia's poverty rate has skyrocketed. Citing a World Bank document entitled "June 2025 Update to the Poverty and Inequality Platform (PIP)", the World Bank has changed the calculation from purchasing power parities (PPP) 2017 to PPP 2021 which was published in May 2024 by the International Comparison Program. By adopting PPP 2021, three global poverty lines have changed from PPP 2017. 

This is because the conversion method that adjusts purchasing power between countries is different between PPP 2017 and PPP 2021. 

For information, PPP determines the comparison of prices of the same goods and services in various countries after the exchange rate is adjusted. However, the US dollar value used in PPP is not the current exchange rate, but purchasing power parity. 

The changes include the international poverty line to calculate the level of extreme poverty, which changed from 2.15 US dollars to 3 US dollars per person per day. Then, for lower-middle income countries it changed from 3.65 US dollars to 4.20 US dollars per person per day, and for upper-middle income countries it changed from 6.85 US dollars to 8.30 US dollars per person per day. As a result, the number of poor people in various countries and regions has increased significantly. 

Tag: PIP Poverty And Inequality Platform World Bank