Indonesia’s inequality levels are showing signs of improvement. The Central Statistics Agency (BPS) reported a decline in the Gini Ratio, the key measure of spending inequality. This shift reflects gradual progress in narrowing the gap between the wealthiest and the poorest households.
Key Facts & Background
National Gini Ratio: As of September 2025, Indonesia’s Gini Ratio fell to 0.363, down from 0.375 in March 2025.
Urban vs. Rural Divide:
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- Urban areas recorded a Gini Ratio of 0.383, lower than 0.395 in March 2025.
- Rural areas posted a Gini Ratio of 0.295, slightly down from 0.299 in March 2025.
World Bank Indicator: The share of spending by the bottom 40 percent of households rose to 19.28 percent, up from 18.65 percent in March 2025 and 18.41 percent in September 2024.
Regional Variation:
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- Highest inequality: Papua Selatan with a Gini Ratio of 0.426.
- Lowest inequality: Bangka Belitung with a Gini Ratio of 0.214.
Trend Analysis: Both urban and rural areas showed improvements, with rural households recording stronger gains in spending share.
Policy Context: The decline reflects government programs aimed at boosting household consumption, social assistance, and rural development.
Strategic Insights
The decline in Indonesia’s Gini Ratio to 0.363 signals modest but meaningful progress in reducing inequality. Rising spending among the bottom 40 percent of households suggests that social assistance and rural development programs are beginning to yield results. However, the persistent gap between urban and rural areas, and stark regional disparities such as those in Papua, highlight the need for more targeted interventions. Sustaining this trend will require continued investment in education, infrastructure, and inclusive economic opportunities to ensure that growth benefits all segments of society.