Every year, the World Bank (WB) Group classifies the world’s economies into four income groups: low, lower-middle, upper-middle, and high.
In the World Development Indicators all 189 World Bank member countries, along with 28 others with populations of more than 30,000 are classified by income level and geographic region for the presentation of key statistics allowing users to aggregate, group, and compare statistical data as needed.
These updated classifications beginning each fiscal year from July 1 to June 30 are based on the previous year’s Gross National Income (GNI) per capita, expressed in U.S. dollars using the Atlas method.
A country’s income classification not only reflects its level of development, but it also has the potential to influence its development trajectory. It affects eligibility for official development assistance and concessional financing.
Since the late 1980s, the classification of countries into income categories has transformed. The number of low-income countries has steadily declined, while the number of high-income countries has increased.
In 1987, 26% of countries in East Asia & Pacific were low-income. But by the year 2024, only 3% remained in this category.
While looking at the Europe & Central Asian nations, there were no low-income countries in both 1987 and 2024, with a slight decrease in high-income countries from 71% to 69%.
Among the Latin America & the Caribbean nations, low-income countries reduced from 2 in 1987 to 0 in 2024, while high-income countries increased from 9% to 46%.
In Middle East & North Africa countries, low-income countries increased from 2 to 3, with high-income countries rising to 35%.
But while talking about the countries located in South Asia, all countries moved from low-income in 1987 to lower-middle- and upper-middle-income by 2024.
In the Sub-Saharan Africa region, low-income countries decreased from 75% to 45%, with one country reaching high-income status.
As per the report, Central American countries with coastlines on the Caribbean and Pacific Costa Rica moved from the “upper-middle income” to the “high income” category.
Likewise, West African nation Cabo Verde and Oceania country Samoa both moved up from the “lower-middle income” to the “upper-middle income” category this year. In 2024, Cabo Verde’s GDP grew 7.3% while Samoa’s economy grew 9.4%.
African nation Namibia was the only country whose classification moved downward this year, from the “upper-middle income” to the “lower-middle income” category.
WITH CREDIT: Based on Mr. Eric Metreau (Senior Economist), Ms. Kathryn Elizabeth Young (Economist, Development Data Group, Development Economics) and Ms. Shwetha Grace Eapen (Statistical Analyst, Development Data Group) at the World Bank Group analytical report.
