The World Bank noted that as many as 60.3% of Indonesians in 2024 can be classified as poor, based on the poverty line threshold for upper-middle-income countries.
Citing the Macro Poverty Outlook report published on the 10th of April, the World Bank classified Indonesia as having achieved upper-middle-income country status since 2023. However, by the following year, 60.3% of the Indonesian population — or approximately 171.9 million people — could be categorised as poor.
As context, the World Bank uses the poverty line threshold for upper-middle-income countries based on daily expenditure of US$6.85 — or around Rp115,000 — per person, assuming an exchange rate of Rp16,780 to the US dollar.
“Growth remains resilient, poverty and unemployment fell, but middle-class job creation lags. Global and domestic policy uncertainties triggered portfolio outflows, pressuring the Rupiah. Growth is projected to average 4.8% through 2027, but uncertainty in trade policy could impact investment and growth. Structural reforms to accelerate productivity growth, alongside fiscal and monetary prudence, are key to advancing the government’s growth agenda,” wrote the World Bank, as cited from the Macro Poverty Outlook report.
However, the World Bank also estimates that the poverty rate in Indonesia will decline to 58.7% this year, followed by a further drop to 57.2% in 2026, and then to 55.5% in 2027.
Furthermore, the World Bank believes that this potential reduction in the number of poor Indonesians over the coming years could help drive the nation’s economic growth to at least 6%. In addition, Indonesia is still expected to have the potential to reach high-income country status in 2045, exactly 100 years after its national independence.
“Indonesia achieved upper-middle-income status in 2023 and aims for high-income status by 2045. To reach this goal, Indonesia must accelerate its growth to at least 6%. The Government is targeting 8% by 2029 through higher investment. While robust demand has supported steady economic performance and brought poverty down, accelerating growth requires implementing structural reforms to boost the country’s growth potential and mitigate overheating risks,” wrote the World Bank as well.