World Bank revises Sri Lanka poverty figures, says crisis still pushed 2 million into poverty
The World Bank has revised down its estimates of poverty in Sri Lanka during the economic crisis after adopting an improved methodology, but says the new figures do not change the broader picture that poverty roughly doubled and around two million people were pushed below the poverty line.
According to an FAQ accompanying the October 2026 Sri Lanka Development Update, the World Bank has revised its poverty estimates for 2020-2024 using annual household-level data from the Labour Force Survey instead of relying primarily on macroeconomic aggregates. The change also affects estimates and projections for 2025-2028.
Under the revised methodology, the poverty rate based on the World Bank’s US$4.20-a-day poverty line is estimated to have risen from 11.5% in 2019 to a peak of 20.7% in 2023.
The previous methodology had estimated the 2023 poverty rate at 27.6%.
The revised figures put poverty at 18.4% in 2024 and 16.9% in 2025, with the rate projected to decline to 15.8% in 2026, 14.8% in 2027 and 14% in 2028.
However, the World Bank stressed that the revision does not mean poverty suddenly fell by around seven percentage points.
“The estimated crisis peak is about 7 percentage points lower than under the earlier method, but poverty on the ground has not changed, it is now measured more accurately,” the report said.
The 2019 baseline remains unchanged, while poverty still roughly doubled during the crisis.
The World Bank said the revised figures indicate that an estimated two million people were pushed into poverty between 2019 and the 2023 peak, with poverty expected to remain above pre-crisis levels through at least 2028.
The report also highlighted the continuing impact of the crisis on Sri Lankan households. Real labour incomes fell by more than 40% between 2019 and 2023 and have yet to fully recover, while labour force participation dropped from 52.3% in 2019 to 47.4% in 2024 before recovering partially to 49.4% in 2025.
Female labour force participation declined from 34.5% in 2019 to 32.4% in 2024, while stunting among children under five increased from 7.4% in 2021 to 10.1% in 2025.
The World Bank estimates that in 2026, two-fifths of Sri Lankans remain poor or are at risk of falling into poverty.
The recovery has also been uneven geographically. Poverty rates outside the Western Province are estimated to be two to three times higher than within it, while poverty in the estate sector is three times the national average.
The World Bank also highlighted a separate measure following Sri Lanka’s reclassification as an upper-middle-income country.
Using the World Bank’s US$8.30-per-person-per-day poverty benchmark for upper-middle-income countries, close to six in 10 Sri Lankans fall below that threshold.
However, the World Bank stressed that this is not a new estimate of Sri Lanka’s poverty rate, but a different benchmark intended to measure living standards typical of upper-middle-income economies.
The World Bank said its revised figures are also not Sri Lanka’s official poverty statistics. The official benchmark remains the Household Income and Expenditure Survey conducted by the Department of Census and Statistics.
New 2025 Labour Force Survey data are expected in November 2026, while official 2025 Household Income and Expenditure Survey data are expected in 2027 and will provide the next comprehensive benchmark for poverty in Sri Lanka. (Newswire)
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