Differences in BPS and World Bank Methods Do Not Affect the Validity of Government Programs
By: Nofer Saputra)*
The discrepancy in poverty figures reported by the Central Statistics Agency (BPS) and the World Bank has once again drawn public attention. This discrepancy in data is often debated, but it need not be viewed as a contradiction. Both have different methodological bases and objectives, and in fact, they complement each other in providing a more comprehensive picture of a country’s socioeconomic conditions. In the Indonesian context, this discrepancy does not necessarily cause confusion or undermine the validity of government programs aimed at alleviating poverty.
The World Bank recently introduced a new standard for measuring poverty, raising the extreme poverty line threshold to US$3 Purchasing Power Parity ( PPP ) per capita per day. Previously, the international standard used was US$2.15 PPP . With this new standard, the World Bank estimates that 5.44 percent of Indonesia’s population will live below the extreme poverty line in 2023. Meanwhile, the Central Statistics Agency (BPS), which still uses the US$2.15 PPP standard, recorded an extreme poverty rate of 0.85 percent in March 2025.
These seemingly disparate figures do not necessarily indicate a calculation error, but rather reflect different methodologies and objectives. BPS emphasized that the US$3 PPP standard adopted by the World Bank has not yet been officially used as the national poverty line because the Indonesian government is still referring to a development plan consistent with the previous standard, namely the 2017 PPP. The World Bank’s use of the 2021 PPP was only announced in June 2025, while Indonesia is currently preparing its 2025-2029 National Medium-Term Development Plan (RPJMN), which still refers to the 2017 PPP, namely US$2.15 PPP.
Ateng Hartono, Deputy for Social Statistics at the Statistics Indonesia (BPS), explained that BPS continues to monitor global developments, including updates to its poverty calculation methods. In fact, BPS has adopted a new approach using a spatial deflator to calculate the extreme poverty line, replacing the previous method that used only the Consumer Price Index ( CPI ). The spatial deflator provides a more accurate picture of price variations between regions down to the district/city level, making the resulting data more relevant to Indonesia’s domestic context.
Beyond methodological aspects, it’s important to understand that the objectives of the national and international poverty lines differ. The national poverty line is used as the basis for domestic social policies, such as targeting social assistance, subsidies, and community empowerment programs. Therefore, the approach used by Statistics Indonesia (BPS), the Cost of Basic Needs ( CBN ), is considered to better reflect the real needs of the Indonesian people. This approach takes into account local consumption structures and region-specific prices relevant to people’s living conditions.
On the other hand, the international poverty line used by the World Bank aims to compare poverty conditions across countries on a global scale. The World Bank’s updated global poverty figures are intended more to assess Indonesia’s relative position among other countries, rather than as a direct reference for domestic policy. Even the World Bank itself emphasizes that there is no single definition of poverty, and that the national poverty line remains the most appropriate measure for determining domestic social programs.
Statistics Indonesia (BPS) data as of September 2024 shows that the national poverty rate was 8.57 percent, or approximately 24.06 million people. Beyond this group, BPS also categorizes the population into vulnerable, middle, and upper classes. Thus, BPS focuses not only on those below the poverty line but also monitors welfare mobility across all levels of society. This provides an important foundation for formulating policies targeting vulnerable groups at risk of falling into poverty during economic turmoil.
In a policy context, the validity of government programs to address poverty is not compromised by data discrepancies between BPS and the World Bank. The government, through BPS, remains firmly grounded in formulating and implementing comprehensive domestic data-driven policies. The decline in the extreme poverty rate from 1.26 percent in March 2024 to 0.85 percent in March 2025, for example, demonstrates the effectiveness of the interventions implemented thus far.
Nurma Midayanti, Director of Social Resilience Statistics at BPS, also stated that BPS continues to communicate and consult with the World Bank regarding poverty calculation methods. This demonstrates the national statistical agency’s strong commitment to maintaining the integrity and credibility of the data used by the government.
It’s also important to note that the World Bank’s increase in the international poverty line does not indicate a decline in a country’s quality of life. Rather, it reflects increased global ambition in determining minimum living standards. In other words, if more people are classified as poor under the new standard, it reflects an increase in global welfare standards, not a decline in the country’s well-being.
Within this framework, Indonesia remains on the right track in alleviating poverty. The validity of BPS data serves as the basis for planning, evaluating, and implementing national programs. Meanwhile, World Bank data remains a crucial reference for assessing Indonesia’s global standing. The differences in methodology between the two institutions should be viewed as complementary, not contradictory. Synergy between domestic and international data is crucial for Indonesia in achieving its sustainable development goals and achieving equitable prosperity.
)* The author is an economist
