A: The World Bank begins measuring global poverty by setting what is known as an absolute international poverty line. The first step is to create a benchmark that is consistent across all countries, using purchasing power parity (PPP) exchange rates. PPP exchange rates are used instead of market exchange rates because they reflect differences in the price of food and other non-tradeable goods, while market exchange rates only apply to goods that are traded internationally.
Between 2008 and 2015 the absolute international poverty line was set at $1.25/day in 2005 dollars. However, in 2015 the World Bank updated this from $1.25 to $1.90 per day, in 2011 dollars, to reflect the changes in the estimated purchasing power of the dollar in poor countries between 2011 and 2005. In both cases, the line was set based on the national poverty lines of 15 very low-income countries, converted to US$ using purchasing power parity exchange rates (more details can be found here)
Sri Lanka has among the lowest extreme poverty rates among countries in the region, as 1.8 percent of the population were estimated to be extremely poor in 2013. However, living standards remain low, as nearly 45 percent of the population lived on less than $5 per day in 2013.