Gini Ratio Falls to 0.375 in March 2025, Signaling Narrowing Income Gap

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JAKARTA, Investortrust.id – Indonesia’s income inequality continued to decline in early 2025, with the country’s Gini ratio falling to 0.375 in March from 0.381 in September 2024, according to the Central Statistics Agency (BPS). This marks a sustained trend toward more equitable household spending, especially in rural regions.

The Gini ratio, a key metric of inequality where 0 denotes perfect equality and 1 represents maximum inequality, showed its lowest level since before the pandemic. The March figure is also down from 0.379 in March 2024, strengthening indications that government efforts to narrow the spending gap are gaining traction.

Ateng Hartono, Deputy for Social Statistics at BPS, said the latest data—released in the agency’s Poverty Profile of Indonesia March 2025 report—demonstrates meaningful progress in addressing disparities across the archipelago.

“This decline is a promising signal for the government’s efforts to reduce economic disparities nationwide,” Ateng said at a press briefing at BPS headquarters in Jakarta on Friday.

From March 2019 to March 2025, Indonesia has broadly seen a downward trajectory in inequality, despite a pandemic-induced uptick in 2020. The Gini ratio briefly peaked at 0.388 in March 2023 before returning to a downward path, reaching 0.379 in March 2024. After a slight increase in September 2024, the ratio declined again in March 2025.

Rural Areas Show More Equal Distribution

The gap in inequality between urban and rural areas remains significant. In March 2025, the Gini ratio for urban areas stood at 0.395, down from 0.402 in September 2024. Meanwhile, rural areas recorded a substantially lower ratio of 0.299, a decrease from 0.308 in the previous period.

“Lower Gini ratios in rural areas suggest a more even distribution of household expenditures,” Ateng explained.

BPS also cited data from the World Bank’s alternative measure of inequality, which tracks the share of total spending by the poorest 40% of the population. This group accounted for 18.65% of national expenditure in March 2025, up from 18.41% in September 2024 and 18.40% a year earlier—signaling an improvement in the welfare of low-income households.

“An increase in the share of spending by the bottom 40% generally reflects a more equitable distribution,” Ateng said.

Jakarta Posts Highest Inequality

Despite national progress, inequality remains pronounced in several provinces, particularly in the capital.

Jakarta posted the highest Gini ratio in March 2025 at 0.441, significantly above the national average. At the other end of the spectrum, the Bangka Belitung Islands recorded the most equal distribution with a ratio of 0.222.

In total, seven provinces reported Gini ratios exceeding the national average, highlighting the unevenness of progress across regions. These include the Special Region of Yogyakarta (0.426), West Java (0.416), South Papua (0.412), Papua (0.404), Gorontalo (0.392), and Riau Islands (0.382).

“These regional disparities show that, while the national picture is improving, localized strategies remain crucial,” Ateng added.

Toward a More Equitable Economy

Taken together, the data from March 2025 offer renewed optimism that government policies aimed at poverty alleviation and income redistribution are beginning to show tangible results. The decline in both national and regional Gini ratios, coupled with an increase in spending share among the poorest Indonesians, reflects growing momentum toward a more inclusive economy.