World Bank Revises Global Poverty Estimates For 2025

The World Bank has updated its global poverty estimates up to 2023, incorporating projections through 2025. Released on June 5, 2025, these revisions reflect significant methodological updates, particularly involving newly adopted Purchasing Power Parity (PPP) values from 2021 and the introduction of revised global poverty thresholds.

This update marks a pivotal shift in how global and regional poverty is quantified, including substantial implications for countries like India.

Updated Poverty Metrics From The World Bank

Changes in Survey Data and Methodology

The Poverty and Inequality Platform (PIP), maintained by the World Bank, incorporated several important revisions in its latest update.

This included refreshed household survey data across numerous countries, with India’s data notably revised. These updates align with a broader methodological shift driven by newer PPP values and national poverty benchmarks.

Integration of 2021 PPP Values

In May 2024, the International Comparison Program released the 2021 PPPs, reflecting updated global price levels while maintaining the prior methodological framework.

These values are now embedded in the World Bank’s poverty assessments, ensuring more accurate cross-country comparisons.

Simultaneously, PIP continues to provide legacy series based on 2017 PPPs for historical consistency.

Introduction of Revised Global Poverty Lines

With the integration of the 2021 PPPs, global poverty lines have been recalibrated. The threshold for extreme poverty has been raised from $2.15 to $3.00 per day.

Additionally, the lower-middle-income (LMIC) and upper-middle-income poverty lines have increased from $3.65 to $4.20 and from $6.85 to $8.30, respectively.

These adjustments align with national poverty standards observed across income brackets, capturing median values in PPP-adjusted terms.

Global And Regional Poverty Trends

Rise in Extreme Poverty Rates

The combined effect of updated data and revised poverty lines has resulted in higher global poverty estimates. The extreme poverty rate for 2022 has been revised upward from 9.0% to 10.5%. This reflects an increase in the global population living in extreme poverty—from 713 million to 838 million individuals.

Regional Variations in Poverty Estimates

While most world regions experienced an upward revision in poverty rates, South Asia stood out with a reduction. Sub-Saharan Africa saw the steepest increase, with its poverty rate for 2022 revised from 37.0% to 45.5%. By contrast, South Asia’s rate decreased from 9.7% to 7.3%, reflecting a positive shift in the region’s poverty trajectory.

Projections for 2025

Despite the rise in historical figures, projections show a marginal improvement. Global extreme poverty is expected to decline slightly from 10.5% in 2022 to 9.9% by 2025, based on nowcasted estimates.

India’s Poverty Profile Under New Estimates

Reduction in Extreme Poverty at $3 Threshold

India has witnessed a sharp decline in extreme poverty when assessed at the revised $3 per day threshold. According to the latest data, the proportion of people living in extreme poverty fell to 5.3% in 2022–23, down from 27.1% in 2011–12. This corresponds to a reduction in absolute numbers from 344.47 million to 75.24 million individuals.

Poverty at $2.15 Daily Benchmark

Using the previous extreme poverty line of $2.15 per day (based on 2017 prices), India’s poverty rate for 2022 stands at just 2.3%, a substantial drop from 16.2% in 2011–12. In absolute terms, the number of people below this threshold fell from 205.93 million to 33.66 million.

Response to Inflation-Adjusted Benchmarks

Despite adjustments in poverty thresholds due to inflation, India’s performance remains strong. The country’s poverty rate rises from 2.3% (at $2.15/day) to 5.3% (at $3/day) for 2022–23, yet the figures still indicate significant improvement over the last decade.

Poverty Trends By Income Category

• Shift in LMIC Poverty Estimates: At the LMIC poverty line of $4.20/day (up from $3.65), India’s poverty rate decreased from 57.7% in 2011–12 to 23.9% in 2022–23. The number of individuals under this threshold dropped from 732.48 million to 342.32 million.
• Revised Poverty Figures Using 2017 Benchmarks: If the older LMIC benchmark of $3.65/day is used, India’s poverty rate in 2022 falls from 61.8% to 28.1%. Around 401 million people are recorded as poor under this threshold in 2022, based on the World Bank’s updated population estimate of 1438.07 million.
• Rural and Urban Disparities: Poverty reduction has been more pronounced in urban areas. Under the $3.65/day line, rural poverty declined from 69% to 32.5%, while urban poverty fell from 43.5% to 17.2% between 2011–12 and 2022–23.
• Education and Poverty Gap: A sharp divide in poverty rates is evident when analyzed by education levels. In 2022–23, 35.1% of individuals aged 16 and above without formal schooling lived below the poverty line, whereas only 14.9% of those with post-secondary education fell into this category.

Decline In Multidimensional Poverty

Trends in Non-Monetary Deprivation

According to the World Bank’s Multidimensional Poverty Index (MPI), non-income-based poverty in India has also decreased substantially. From 53.8% in 2005–06, the MPI dropped to 15.5% in 2022–23. The MPI encompasses six indicators: consumption or income, educational attainment, school enrollment, access to drinking water, sanitation, and electricity.

NITI Aayog’s MPI Estimates

India’s national planning body, NITI Aayog, provides corroborating data. It estimates that the population living in multidimensional poverty decreased from 29.17% in 2013–14 to 11.28% in 2022–23, reinforcing the broader trends identified in World Bank assessments.