World Bank Updates Global Poverty Line to $3 Per Day – What You Need to no
Washington D.C. – June 12, 2025 – In a meaningful shift impacting how extreme poverty is measured globally, the World Bank announced today an update to its international poverty lines. The new benchmark for extreme poverty is set at $3.00 per person per day, a revision based on 2021 purchasing power parities (PPPs) and updated national poverty lines. This change will have far-reaching consequences for assessing poverty levels, especially in low-income countries.
Why the Change?
The World Bank states the update is crucial to more accurately reflect the current cost of living and household consumption patterns around the world. By utilizing more recent data, the new poverty lines aim to provide a more realistic picture of economic hardship. This isn’t simply an adjustment for inflation; it’s a recalibration based on how people actually live and what they need to survive in today’s economies.
What Does This Mean?
The immediate impact of this change is a likely increase in the reported number of people living in extreme poverty. As reported by multiple news outlets, including the Jakarta Post and Between news, the new calculations are already being applied in countries like Indonesia, revealing a jump in the number of people considered poor – now estimated at 194.6 million in Indonesia alone.
This highlights a critical point: the updated poverty line doesn’t necessarily mean more people have become impoverished, but rather that the existing level of poverty is being measured more accurately.
Global Implications & national Responses
The updated poverty line is prompting a re-evaluation of poverty reduction strategies worldwide. Several countries are responding by revisiting their own national poverty calculations:
Indonesia: Is actively exploring a new poverty calculation method considering the World Bank’s update.
Pakistan: The EastAfrican reports on the implications of the $3/day line, signaling a broader regional discussion.
* Other Nations: Governments are likely to reassess social safety nets and economic policies to address the increased number of people now classified as living in extreme poverty.
Looking Ahead
The World Bank’s decision underscores the dynamic nature of poverty and the importance of regularly updating measurement tools. This change will undoubtedly influence international growth goals and aid allocation, pushing for more targeted and effective poverty reduction programs. The coming months will see a ripple effect as nations grapple with the implications of this new benchmark and work towards a more accurate understanding – and ultimately, a reduction – of global poverty.
