Sri Lanka 65% Poverty Claim Is Misleading: World Bank Figure Is a Falling Forecast

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Sri Lanka rejoined the World Bank’s upper-middle-income group in July 2026, and soon afterwards a startling number began to circulate. Posts claimed that poverty had hit a record 65% for the first time in history, citing a World Bank report. The number was real, but the posts did not say what it measured or that it was a forecast. Here are the posts that carried the claim.

Social Media Posts:

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Fact-Check:

The viral posts named the World Bank’s Macro Poverty Outlook (MPO) report for Sri Lanka as their source. We read the report, the World Bank’s related updates, and the official national data to check whether Sri Lanka’s poverty rate had reached 65%.

The 65.4% Figure Is Real, but It Is a 2026 Forecast at the US$8.30 Line

The MPO report, published in April 2026, does contain a 65.4% figure. It is a forecast for 2026, not a measured value. The report gave poverty rates for three different poverty lines, and the posts quoted the highest one without naming the line.

The World Bank Measures Poverty With Three Lines, Like Three Rulers

A simple way to picture it is one group of people measured with three rulers. The short ruler counts only the poorest. The middle ruler counts more people. The long ruler counts the most. The people did not change. Only the ruler did.

Since June 2025, the World Bank has used new international poverty lines based on 2021 price levels (2021 PPP). Each line reflects the typical national poverty line of a group of countries. US$3.00 per day is used for low-income countries, US$4.20 for lower-middle-income countries and US$8.30 for upper-middle-income countries. PPP dollars are not dollars at market exchange rates. They are a unit adjusted for price differences between countries.

On that basis, the poverty rate forecast for 2026 is 6.9% at the US$3.00 line, 20.1% at the US$4.20 line and 65.4% at the US$8.30 line.

World Bank Poverty Estimates and Forecasts for Sri Lanka, 2023 to 2028 (e = estimate, f = forecast)

Poverty Line (2021 PPP)	2023	2024	2025e	2026f	2027f	2028f
International poverty rate (US$3.00/day)	10.8%	9.3%	7.9%	6.9%	6.5%	6.2%
Lower-middle-income poverty rate (US$4.20/day)	27.6%	25.0%	22.1%	20.1%	19.5%	18.9%
Upper-middle-income poverty rate (US$8.30/day)	71.1%	69.3%	66.7%	65.4%	64.5%	63.4%

Source: World Bank, Sri Lanka Macro Poverty Outlook (April 2026)

All Three Lines Show Poverty Falling

The table shows that the World Bank estimated a fall in Sri Lanka’s poverty rate every year from 2023 on all three lines. At the US$8.30 line, it estimated 71.1% for 2023, 69.3% for 2024 and 66.7% for 2025, and forecast 65.4% for 2026. The highest value in the report’s own series was 71.1% in 2023, soon after the 2022 crisis. The claim that poverty reached 65% for the first time in 2026 is therefore disproved by the report itself.

At the US$4.20 line, the poverty rate was estimated at 27.6% in 2023 and forecast to fall to 20.1% by 2026.

The Report’s Headline Forecast Is a Fall in Poverty to 20.1%

The MPO report’s main poverty statement uses the US$4.20 line for lower-middle-income countries. It reads: “Poverty is projected to decline to 20.1 percent (US$4.20 per person per day, PPP) in 2026 but the pace of poverty reduction is expected to slow.” In other words, poverty was forecast to fall, although more slowly. The report also noted that poverty remained about double its 2019 level after the 2022 crisis.

Sri Lanka Sits at the Very Bottom of the Upper-Middle-Income Group

Sri Lanka first entered the upper-middle-income category in July 2019 and fell back to the lower-middle-income category in July 2020. After 5.0% economic growth in 2025 and a rise in gross national income (GNI) per capita, it rejoined the upper-middle-income group on July 1, 2026, according to the World Bank’s classification. The April MPO report was published before this change, and it gave all three poverty lines regardless of the classification.

Under the World Bank’s 2026 (FY27) classification, an upper-middle-income country must have an Atlas GNI per capita between US$4,636 and US$14,375. Sri Lanka’s 2025 figure was US$4,670, which cleared the threshold by only US$34. The World Bank said Sri Lanka had “only narrowly crossed the threshold”. World Bank | Archived Link

The US$8.30 line is the typical poverty line for the whole upper-middle-income category. It applies equally to a country with a GNI per capita of US$4,670 and to one with US$14,375. Sri Lanka sits at the very bottom of the category, so applying this line to it produces a high percentage. This is our interpretation from comparing the line with the income range, not a World Bank statement.

Official National Data Stops at 2019, So Every Later Figure Is an Estimate

According to the Department of Census and Statistics (DCS), Sri Lanka’s 2019 national poverty rate was 14.3%. The DCS calculated it from the 2019 Household Income and Expenditure Survey (HIES 2019), the last survey for which it released poverty data. The MPO report states that actual data exists only for 2019. The values for 2020 to 2025 are estimates (nowcasts) based on HIES 2019, and the values for 2026 to 2028 are forecasts.

The DCS has scheduled the HIES 2025 poverty indicators for release. The original date was October 30, 2026, and the DCS release calendar now shows December 31, 2026.

The official poverty line for July 2026 was Rs. 17,679 per person per month. This is the minimum spending needed to meet basic needs. It is not a poverty rate.

The World Bank’s Sri Lanka Development Update 2025 estimated the 2024 poverty rate at 24.5%, measured against the US$3.65 line then in use. The 2026 MPO report estimated 25.0% for 2024 at the US$4.20 line. These numbers use different lines and cannot be compared directly, but both show poverty at roughly double its 2019 level.

Falling Poverty Does Not Mean Low Poverty

Poverty is falling slowly, yet it remains high. A 2026 rate of 20.1% at the US$4.20 line means about one in five people still live below it, and the World Bank expects the pace of decline to slow. The MPO report also noted that 32.8% of households experienced moderate or severe food insecurity in 2025. A higher income classification measures the average income of the country. It does not show whether poor households have recovered.

Prof. Wasantha Athukorala Said a Higher Income Class Does Not Cut Poverty Overnight

Prof. Wasantha Athukorala of the Department of Economics, University of Peradeniya, explained to us how Sri Lanka became an upper-middle-income country, why the poverty lines differ between the two categories, and why individual incomes do not rise the moment a country is reclassified. His statement follows.

“Sri Lanka became an upper-middle-income country because our per capita income last year rose above the relevant threshold. The methods of calculating poverty in upper-middle-income and lower-middle-income countries are different. The calculations are based on how many dollars a person earns per day on average, so the data calculated by the World Bank are often based on secondary data.

Sri Lanka’s poverty rate generally stands at around 21.5%. That level does not change instantly when we move into the upper-middle-income category, because the criteria used to measure poverty and the criteria used to classify a country’s income level are different.

For a country’s poverty to fall, changes have to take place in the economy over a prolonged period. It cannot swing sharply within a year or two. Our nominal gross domestic product rose, which lifted per capita income and made us an upper-middle-income country.

There is a big difference between the daily per capita income lines in US dollars used to measure poverty in upper-middle-income and lower-middle-income countries. But individuals’ incomes do not rise the moment a country moves into the upper-middle-income category. That takes time.”

Editor’s note: The 21.5% figure the professor mentioned is approximate. At the US$4.20 line in the World Bank MPO report, the rate is 22.1% for 2025 and 20.1% forecast for 2026. World Bank figures should also be understood as estimates and forecasts based on HIES 2019, not as secondary data.

Check the Line, the Year, and the Label Before Sharing a Poverty Number

Three quick checks would have stopped this claim from spreading. First, which poverty line was used, US$3.00, US$4.20 or US$8.30? Second, was the number measured, estimated, or forecast, and for which year? Third, how does it compare with earlier years in the same report?

The pattern is not new. In 2024, we also fact-checked a misleading claim about a World Bank poverty forecast. The upper-middle-income line at that time was US$6.85, and it gave about 66% for 2023. Since the lines have been revised, old and new poverty numbers should not be compared. It is also possible that future World Bank reports give more prominence to the US$8.30 line now that Sri Lanka is in the upper-middle-income group, so readers should always check which line is being quoted.

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Conclusion:

Our fact-check found that the posts claiming Sri Lanka’s poverty rate reached a historic 65% are misleading. The World Bank’s April 2026 Macro Poverty Outlook does contain a 65.4% figure, but it is a forecast for 2026 at the US$8.30 (2021 PPP) line used for upper-middle-income countries. The same report estimated 71.1% for 2023, 69.3% for 2024 and 66.7% for 2025 at that line, so 65.4% is neither a first nor a peak.

At the lower-middle-income line (US$4.20 per day), the report’s main poverty indicator, poverty, is forecast to fall from 27.6% in 2023 to 20.1% in 2026. Sri Lanka entered the upper-middle-income group with a GNI per capita of US$4,670, only US$34 above the US$4,636 threshold, so applying the category’s typical US$8.30 line to it yields a high percentage.

Poverty nevertheless remains significantly high. The last official national rate was 14.3% for 2019, and the DCS is due to release the HIES 2025 poverty indicators by the end of 2026. The World Bank Macro Poverty Outlook, World Bank income classification data and DCS data confirm these findings.