Source : INDIA TODAY NEWS
Six countries have climbed into a higher income group in the latest World Bank update, showing that there is more than one way for an economy to progress. While some countries reached the next level through strong economic growth, others benefited from improved national data or changes in population estimates. India, however, remains in the lower-middle-income category.
Every year on July 1, the World Bank’s Development Data Group updates the income classification of economies based on their Gross National Income (GNI) per person from the previous calendar year. The latest edition covers 218 economies and will remain the global reference until the end of June 2027.
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WHY THE CLASSIFICATION MATTERS
The World Bank groups countries into four income categories, i.e., low income, lower-middle income, upper-middle income and high income. These classifications are not just for comparison. They are used by governments, researchers and international organisations to track economic progress and decide which countries qualify for concessional loans and development support.
This year, no country moved to a lower category. Instead, six countries improved their position. Jordan, Micronesia, the Philippines, Sri Lanka and Vietnam moved from the lower-middle-income group to the upper-middle-income category, while Togo moved from low income to lower-middle income.
DIFFERENT PATHS TO THE SAME DESTINATION
Although all six countries crossed the required income threshold, each followed a different path.
Vietnam’s rise was driven by strong export-led growth. The country recorded export growth of more than 15% in both 2024 and 2025, while its economy expanded by 7% and 8% during those years. Between 2021 and 2025, its GNI grew by an average of 10% annually, making it one of the region’s strongest performers.
The Philippines reached the upper-middle-income group after recording broad-based economic growth. Its economy expanded by an average of 5.8% a year over the past five years, with growth spread across manufacturing, services and other major sectors rather than being driven by a single industry.
Sri Lanka’s upgrade comes just three years after the country faced one of its worst economic crises. After suffering a severe financial collapse in 2022, the country’s economy returned to growth. Real GDP expanded by 5% in 2025, supported by improvements in industry, financial services and tourism.
Micronesia recorded steady growth as it continued to recover from the effects of the COVID-19 pandemic. Construction and agriculture supported the economy, although lower income from overseas sources limited the pace of improvement.
Jordan’s upgrade was mainly the result of a revision in its national accounts. After updating its economic data using better surveys and improved statistical methods, the country found that its economy was nearly 10% larger than previously estimated. Combined with moderate economic growth, this was enough to move it into the next income category.
Togo’s case was different. The country’s population estimate was revised downward after the results of the 2022 census. Since GNI is measured per person, a smaller population increased its income per capita even though total national income changed little. Economic growth and exchange rate movements also supported the upgrade.
WHERE DOES INDIA STAND?
India remains in the lower-middle-income category.
India continues to be classified as a lower-middle-income economy. Despite being one of the world’s fastest-growing major economies, its GNI per capita remains below the World Bank’s threshold for the upper-middle-income group.
According to the latest World Bank classification, India’s Gross National Income per capita is still below the threshold required to move into the upper-middle-income group.
India has recorded strong economic growth in recent years and remains one of the world’s fastest-growing major economies. However, because of its large population, income per person remains lower than the level needed for reclassification.
For India to move into the upper-middle-income category, sustained economic growth combined with faster growth in per capita income will be essential. While the country has made significant progress over the past decade, it has not yet crossed the World Bank’s income threshold for the next category.
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SOURCE :- TIMES OF INDIA
