The World Bank Macro Poverty Outlook (MPO) is a report produced for 150 developing countries, released twice a year ahead of the Spring and Annual Meetings of the World Bank Group (WBG) and the International Monetary Fund. The MPO consists of individual country notes that provide an overview of recent developments, forecasts of major macroeconomic indicators and poverty rates over the next two years, and a discussion of critical challenges for economic growth, macroeconomic stability, and poverty reduction.
To ensure consistency across all WBG member countries, the MPO uses International Poverty Lines (IPLs) for the estimation and forecasting of poverty rates in each country. These poverty lines are constructed to ensure comparability across countries by expressing them in terms of ‘purchasing power parity’ (PPP). PPPs are used to convert different currencies into a common comparable unit, while accounting for price differences across countries. Since 2025, the World Bank Group has applied an International Poverty Line of US$3.00 per person per day (2021 PPP) for low-income countries, and an International Poverty Line of US$4.20 per person per day (2021 PPP) for lower-middle income countries.
The most recent MPO, published in April 2026, using the WBG methodology estimated that in 2026 44.3 percent of Timor-Leste’s population had an income below the International Poverty Line for low-income countries (US$3.00 per person per day, 2021 PPP), and 71.7 percent of the population had an income below the International Poverty Line for lower-middle income countries (US$4.20 per person per day, 2021 PPP). These estimates have attracted public interest, and this note explains why the World Bank Group uses these international poverty lines and why the poverty estimates produced with them differ from national poverty estimates.
What are the International Poverty Lines?
Measuring poverty regularly using timely, relevant data is critical to tracking progress toward the World Bank Group’s goal of eliminating poverty on a livable planet. The World Bank Group applies this approach at the global level using three international poverty lines, each corresponding to a different group of countries classified by their GNI per capita: US$3.00 per person per day for low-income countries, US$4.20 for lower-middle-income countries, and US$8.30 for upper-middle-income countries. These lines are designed to benchmark countries against global standards and monitor worldwide progress in poverty reduction. International poverty lines are revised periodically to ensure that measurements reflect global conditions.
How are International Poverty Lines different from the National Poverty Line (NPL)?
The World Bank Group’s international poverty estimates differ from national poverty measures because they are anchored in living standards and costs of living across groups of comparable countries, rather than in the circumstances of a single country. The US$3.00 International Poverty Line (IPL) reflects the typical (median) national poverty line in 25 low-income countries. Similarly, the US$4.20 per person line reflects the typical national poverty line among 47 lower-middle-income countries. With an Atlas-method GNI per capita of US$1,510 in 2025, Timor-Leste falls within the lower-middle-income range (in 2026, the GNI per capita range is from US$1,136 to US$4,495) and is therefore assessed against the US$4.20 poverty line.
National poverty lines, on the other hand, are set by national governments to reflect each country’s specific context. They capture the cost of meeting basic needs based on local consumption patterns and prices and are used to guide economic development progress and guide policies, such as the targeting of social assistance programs and other poverty alleviation strategies.
Poverty rates naturally vary with the poverty line used. A higher line simply sets a higher bar, meaning more people fall below it and are classified as poor. This does not, however, mean that living conditions have worsened.
What do these poverty rates measure?
For Timor-Leste, the MPO reports both estimated and projected poverty rates at the US$3.00 and US$4.20 lines. The reason for doing this is that although Timor-Leste is classified as a lower-middle-income country, the US$3.00 line is more appropriate to its context, given that its GNI per capita is near the lower-income threshold and its current national poverty line (US$ 2.93 in 2021 PPP) is very similar to the US$3.00 international line.
It is worth noting that the poverty rates published in the MPOs are based on the latest publicly available official statistics on household living standards for each country. In Timor-Leste, these data come from the 2014 Survey of Living Standards (TL-SLS 2014), which collects detailed information on household consumption of food, goods and services, housing, health, and education. Because 2014 is the latest available survey year, the MPO poverty rates are projected from 2015 to 2026 (estimates) and from 2027 to 2028 (forecasts), based on assumptions about how GDP per capita growth translates into poverty reduction.
As part of the ongoing collaboration between the World Bank Group and the National Institute of Statistics of Timor-Leste (INETL), the analysis of the most recent (2024) Survey of Living Standards (TLSLS) has been completed. Updated poverty estimates will replace the current projections in future editions of the MPO once the official statistics from the 2024 TLSLS have been published.
How should the international poverty rates be interpreted?
There are two important points to reiterate and keep in mind when reading the April 2026 Timor-Leste MPO.
First, because household surveys are not conducted annually, poverty rates published for years after 2014 are estimates projected from the 2014 baseline, rather than directly measured rates. In 2014, measured poverty was 44.0 percent at the US$3.00 (2021 PPP) line and 71.3 percent at the US$4.20 (2021 PPP) line. Using this baseline, the April 2026 MPO estimates show poverty declining from 48.3 percent in 2023 to 42.1 percent by 2028 at the US$3.00 line, and from 74.5 percent to 70.1 percent at the US$4.20 line. This downward trend reflects Timor-Leste’s actual and projected economic growth.
Second, the poverty rates published in the MPO use IPLs, which are designed primarily for cross-country comparisons and tracking progress toward global poverty reduction, rather than for informing country-specific policy. For national policymaking, the national poverty line is the relevant benchmark. For this reason, poverty rates based on the IPLs should not be directly compared with national poverty rates. The two measures are intentionally different, reflecting different definitions of poverty and serving different purposes.
Because international poverty estimates are updated when new official household survey data become available, the 2024 TLSLS provides an opportunity to update Timor-Leste’s poverty estimates. The World Bank Group has been providing technical assistance to Timor-Leste’s National Institute for Statistics (INETL I.P) to support analysis of the 2024 TLSLS and calculation of updated national poverty measures. Updated poverty statistics using the international poverty lines will be included in future editions of the MPO following publication of the 2024 TLSLS survey data and associated national poverty statistics.