Economic Inequality in Indonesia Increased in March 2023

The Central Statistics Agency (BPS) calculates Indonesia's income or economic inequality using the Gini ratio. In March 2023, it reached 0.388 points on a scale of 0-1.

This figure increased by 0.007 points compared to the Gini ratio in September 2022, which was 0.381. The March 2023 Gini ratio was also 0.004 points higher than the March 2022 figure of 0.384 points.

Regionally, the increase in Indonesia's Gini ratio originated from urban areas, reaching 0.409 points in March 2023.

This figure increased by 0.007 points compared to September 2022 (0.402). The urban Gini ratio in March 2023 also rose by 0.006 points compared to March 2022 (0.403 points).

Meanwhile, the rural Gini ratio remained constant between September 2022 and March 2023 at 0.313 points. This figure actually decreased by 0.001 points compared to March 2022 (0.314 points).

(Also read: Poverty and Social Inequality are Indonesia's Biggest Concerns)

BPS stated that nationally, the Gini ratio continuously decreased from March 2017 to September 2019.

"This condition indicates that during that period, there was an improvement in the distribution of household expenditure in Indonesia," wrote BPS in its report, *Indonesia's Household Expenditure Inequality Rate, March 2023*.

However, BPS continued, during the COVID-19 pandemic, the Gini ratio increased in March and September 2020. After 2020, the Gini ratio fluctuated, as seen in the graph.

The Gini ratio or Gini coefficient is measured on a scale of 0 to 1. According to the National Development Planning Agency (Bappenas) website, a Gini ratio of 0 indicates perfect equality, meaning all residents have the same per capita expenditure.

A Gini coefficient of 1 indicates perfect inequality, meaning only one resident has per capita expenditure, and the others have none.

"Therefore, the higher the Gini coefficient, the higher the level of inequality in a region," wrote Bappenas on its official website.

(Also read: Yogyakarta, Province with the Highest Inequality in September 2022)