A new poverty line shifted the World Bank's poverty data. What changed and why?

Summary

$3 a day: A new poverty line has shifted the World Bank’s data on extreme poverty. What changed, and why?In June 2025, the World Bank increased its extreme poverty estimates by 125 million people. This doesn’t mean the world has gotten poorer: it reflects a new, higher International Poverty Line of $3 a day, up from $2.15.To track progress towards ending extreme poverty by 2030, the United Nations relies on the World Bank to estimate the share of people living below a certain threshold, called the International Poverty Line (IPL).In June 2025, the World Bank announced a major change to this line, raising it significantly, from $2.15 to $3 per day.This increase partly reflects inflation — a consequence of the World Bank using international dollars at 2021 prices, updated from 2017 prices.However, the IPL has also increased substantially, even after inflation adjustments. The poverty line has increased in real terms. And with it, so have the World Bank’s estimates of extreme poverty. 125 million people who would not have been counted as extremely poor before June are now included.1This recent rise in the IPL is due to an aspect of the World Bank’s approach that some users of the data may not be aware of. Although it’s an international threshold, it is set to reflect national definitions of poverty typical among low-income countries. Several low-income countries recently raised their own poverty lines, pushing up the IPL.The higher estimates of extreme poverty reflect a higher poverty threshold, not that the world is poorer. The updated data on global incomes accompanying the new IPL shows that incomes among the world’s poorest are higher than previously estimated.Higher incomes but higher extreme poverty — this apparent paradox is unpacked in this article. We’ll explain in more detail how the International Poverty Line is defined, what has changed in the latest World Bank data, and what this means for our understanding of global poverty.See the latest World Bank dataY...