The international poverty line is the threshold the World Bank uses to count people living in extreme poverty worldwide. It is expressed as an amount of daily consumption or income per person, measured in US dollars adjusted for purchasing power parity (PPP), so that one dollar buys roughly the same basket of goods in every country. A person whose daily consumption falls below the line is counted as extremely poor. Since June 2025 the line has been set at US$3.00 a day in 2021 PPP terms.
The line is used to track progress toward the first United Nations Sustainable Development Goal, whose target 1.1 is to eradicate extreme poverty for all people everywhere by 2030. It is the most widely quoted single statistic on global poverty, and it shapes how development agencies, governments and researchers describe the scale of the problem.
How the international poverty line is set
The line is not a measure of what a person needs in any particular place. It is derived from the national poverty lines that the poorest countries themselves use. World Bank economists collect those national lines, convert them into a common currency using PPP exchange rates, and take a typical value for the group of poorest countries. The result is meant to represent what extreme poverty means in the countries where it is most common.
PPP conversion is needed because market exchange rates understate the purchasing power of money in low-income countries, where many goods and services are cheaper than in the United States. PPP factors come from the International Comparison Program, a large global price survey coordinated by the World Bank. Each new round of PPP data changes relative price levels across countries, which is why the line has been revised several times.
History of revisions
- About US$1 a day. Introduced in the World Bank's 1990 World Development Report, using 1985 PPPs. The phrase dollar a day became shorthand for extreme poverty.
- US$1.25 a day. Adopted in 2008 following the 2005 PPP round.
- US$1.90 a day. Adopted in 2015 using 2011 PPPs.
- US$2.15 a day. Adopted in 2022 using 2017 PPPs.
- US$3.00 a day. Adopted in June 2025 using 2021 PPPs.
Each revision was intended to keep the real value of the line broadly constant while reflecting new price data and updated national poverty lines. Changes in the nominal figure therefore do not mean the standard became more generous in the way a simple comparison of dollar amounts suggests, although each update also changes the estimated number of people in poverty.
Higher poverty lines
Because almost no one in upper-middle or high-income countries falls below the extreme poverty line, the World Bank also publishes higher thresholds that are typical of national poverty lines in lower-middle-income and upper-middle-income countries. These lines are revised together with the main line. Researchers also use societal poverty measures that rise with a country's average income.
Measurement and data
Poverty counts are built from household surveys that record consumption or income. Survey coverage is uneven: some countries survey rarely, and conflict-affected states are especially hard to measure. Estimates for recent years are often nowcasts based on growth in gross domestic product (GDP). Domestic inflation is applied to convert survey values to the PPP base year, so poorly measured inflation can bias the results.
Much of the income of the extreme poor is earned in the informal economy or produced for the household's own use, which surveys try to value at local prices. Incoming remittances also count toward household consumption and are a major reason some households rise above the line.
Relevance to finance and payments
Poverty lines shape the targets of financial inclusion programs, social cash transfers and microfinance. Governments and donors use poverty data to decide where to deploy mobile money based benefit payments, and analysts of remittance corridors cite them to show the household impact of transfer costs. The International Monetary Fund (IMF) also refers to poverty measures when designing concessional lending. For the institution that maintains the line, see the World Bank Group industry body profile.
Criticism
Critics argue that the line is too low to represent a decent standard of living, that PPPs built from average consumption baskets may not reflect prices paid by the poorest, and that a single global number hides large differences between rural and urban areas. Others note that progress measured against a very low line can overstate improvement. Supporters reply that the line is deliberately austere, designed to identify the most deprived, and that the higher lines and national measures complement it.