2016, Indonesia's Population Gap Narrowed

Indonesia's Gini ratio decreased by 0.01 points to 0.40 points in September 2016 compared to the same period the previous year. This indicates a further reduction in the income gap between the rich and poor in Indonesia. However, this is not entirely positive news, as the decrease in the Gini ratio is primarily driven by a decline in the income of the upper class. Ideally, a reduction in inequality should be driven by upward mobility from the low-income group to the middle class, and from the middle class to the upper class. This is contradicted by data showing an increase in the poverty depth index.

The Gini ratio is an indicator of overall income inequality. In its calculation, the Gini coefficient compares the distribution of income across the upper, middle, and lower classes. This means the Gini index can remain constant even if there is an increase in income in each class. Conversely, the Gini index can improve without changes in income within each class.