Poverty in Indonesia slightly eased on the back of low inflation. After two years of high inflation (in 2013 and 2014 Indonesia's inflation accelerated to 8.4 percent year-on-year due to the government's fuel subsidy reforms) the nation's consumer price index eased to 3.45 percent (y/y) in June 2016. In the period September 2015 to March 2016 Indonesia's inflation was recorded at 1.71 percent (y/y).

Another positive factor that managed to push the nation's poverty figures lower is the higher average wage of Indonesian farmers in March 2016. Their wage rose 1.75 percent to IDR 47,559 per day in March 2016 from IDR 46,739 per day in September 2015. Meanwhile, the average wage of Indonesian construction workers rose 1.23 percent from IDR 81,481 per day over the same period.

In terms of absolute poverty, Java is the worst case in Indonesia as some 15.0 million people on Java (53.5 percent of Indonesia's total poor population, but "only" 10.23 percent of Java's population) are living below the poverty line. However, also on Indonesia's most populous island there occurred an improvement: compared to one year earlier, the poor population on Java declined by 3.1 percent (from 15.45 million poor individuals in March 2015).

In terms of relative poverty, Maluku and Papua (in the eastern part of Indonesia) show the worst numbers. Slightly over 22 percent of the total local population in Maluku and Papua is poor. Throughout modern and ancient history the eastern part of Indonesia (particularly Papua) has been located far from the main trade routes and therefore it has less of an economic significance, implying less trade and investment, hence higher poverty.

Indonesian Poverty & Inequality Statistics:

  2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Relative Poverty
(% of population)
16.6 15.4 14.2 13.3 12.5 11.7 11.5 11.0 11.2 10.9¹
Absolute Poverty
(in millions)
  37   35   33   31   30   29   29   28   29   28¹
Gini Coefficient/
Gini Ratio
0.35 0.35 0.37 0.38 0.41 0.41 0.41 0.41 0.40

¹ In March 2016
Source: Statistics Indonesia (BPS)