Indonesia’s Poor Drop to 23.85 Million, but Urban Poverty Remains a Concern

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JAKARTA, investortrust.id — Indonesia recorded a decline in its overall poverty rate in March 2025, with the number of poor residents falling to 23.85 million or 8.47% of the population. Yet, government officials are turning their attention to a more troubling trend: a rise in urban poverty.

Coordinating Minister for Economic Affairs Airlangga Hartarto acknowledged the national progress but stressed that poverty in cities had increased and needed further scrutiny. “Moving forward, we will continue to promote investment to create more jobs,” Airlangga said during a press briefing in Jakarta on Friday, July 25.

Although overall poverty is trending down, data from Statistics Indonesia (Badan Pusat Statistik or BPS) show that the urban poor population rose to 11.27 million people, or 6.73% of the urban population, up from 6.66% in September 2024. The increase is mainly attributed to higher male unemployment in cities, a key driver of household vulnerability.

Airlangga explained that urban economies are dominated by services rather than manufacturing, making them more sensitive to economic shifts. He added that the government had already disbursed incentives aimed at stimulating consumption among the urban middle class.

The minister also emphasized the importance of consistency in measuring poverty using internationally recognized benchmarks. “What matters most is purchasing power parity,” he noted, referring to the metric used to align poverty thresholds across countries. At present, the government has no plan to revise its PPP benchmark.

Poverty Line and Key Contributors

Deputy of Social Statistics at BPS, Ateng Hartono, said the number of poor in March 2025 declined by 0.1 percentage points from 24.06 million (8.57%) in September 2024. He highlighted that after an uptick in 2022, poverty rates had gradually fallen over the past two years.

Still, the national poverty line has risen. In March 2025, BPS set the poverty threshold at Rp609,160 per capita per month. With an average poor household size of 4.72 members, the monthly poverty line per household reached Rp2.88 million ($175), up 2.56% from the previous period.

According to BPS data, food items account for 74.58% of the poverty line, with rice, clove-filtered cigarettes, and eggs being the largest contributors. In urban areas, rice alone makes up 21.06% of the poverty basket. Non-food items such as housing (9.11% in cities), fuel (3.06%), and electricity (2.58%) also weigh heavily on poor households.

While cities grapple with inflation and employment woes, rural communities have shown signs of improvement. The number of poor in villages dropped to 12.58 million (11.03%), down from 13.01 million (11.34%) in September 2024. BPS attributed this to better food access and a stronger farmer terms-of-trade index, which boosts rural incomes.

Data Integrity and Transparency

In a separate statement, BPS Chair Amalia Adininggar Widyasanti addressed public concerns over delays in releasing poverty statistics. She clarified that the postponement from July 15 to July 25 was due to additional data verification and alignment with World Bank poverty standards.

“There was no outside interference,” Amalia said during a parliamentary hearing. “We simply wanted to ensure the accuracy and integrity of the data.”