The World Bank has updated its poverty estimates for Sri Lanka following the implementation of an improved tracking methodology, confirming that while peak figures have been adjusted downward, the broader impact of the country’s economic crisis remains severe. The revised assessment demonstrates that poverty roughly doubled between 2019 and 2023, forcing an estimated two million people below the poverty line.
Detailed in an FAQ accompanying the October 2026 Sri Lanka Development Update, the revised figures span 2020 through 2024 and integrate annual household-level data from the Labour Force Survey rather than relying primarily on macroeconomic aggregates. Based on the World Bank’s US$4.20-a-day poverty line, the poverty rate climbed from 11.5% in 2019 to a peak of 20.7% in 2023. While lower than the previous methodology’s estimate of 27.6%, the World Bank highlighted that poverty on the ground did not abruptly decrease by seven percentage points, but is now measured with higher precision against an unchanged 2019 baseline.
Under the revised projections, poverty is estimated at 18.4% in 2024 and 16.9% in 2025, before tapering to 15.8% in 2026, 14.8% in 2027, and 14% in 2028. Despite the projected decline, poverty is expected to remain above pre-crisis levels through at least 2028, with two-fifths of Sri Lankans remaining poor or vulnerable to poverty in 2026.
Key Developments
- Income and Workforce Strain: Real labour incomes dropped by more than 40% between 2019 and 2023 and have not fully recovered. Overall labour force participation fell from 52.3% in 2019 to 47.4% in 2024 before partially rebounding to 49.4% in 2025, while female labour force participation dropped from 34.5% to 32.4% over the same period.
- Rising Malnutrition: Stunting among children under five increased significantly from 7.4% in 2021 to 10.1% in 2025.
- Deep Regional Disparities: Poverty rates outside the Western Province remain two to three times higher than within it, while poverty in the estate sector stands at three times the national average.
- Upper-Middle-Income Metrics: Under the World Bank’s US$8.30-per-person-per-day benchmark—reflecting living standards typical of upper-middle-income economies—nearly six in 10 Sri Lankans fall below the threshold.
The revised World Bank calculations do not constitute Sri Lanka’s official poverty statistics, which are officially determined through the Household Income and Expenditure Survey conducted by the Department of Census and Statistics. New Labour Force Survey data for 2025 are scheduled for release in November 2026, while official 2025 Household Income and Expenditure Survey data expected in 2027 will establish the next formal national benchmark.