Jul 10, 2024
WORLD BANK COUNTRY CLASSIFICATIONS
1. Q: What are the World Bank's main income group classifications for countries?
A: The World Bank classifies countries into four main income groups: Low-income economies, Lower-middle-income economies, Upper-middle-income economies, and High-income economies.
2. Q: How does the World Bank determine these classifications?
A: The World Bank uses Gross National Income (GNI) per capita as the main criterion for classifying economies. GNI can be broadly equated with GDP. The classifications are updated each year on July 1st using the previous year's GNI per capita data.
3. Q: What are the current income thresholds for each group?
A: As of July 1, 2023, the thresholds are:
- Low-income: $1,135 or less
- Lower-middle-income: $1,136 to $4,465
- Upper-middle-income: $4,466 to $13,845
- High-income: $13,846 or more
4. Q: How often are these thresholds updated?
A: The income thresholds are adjusted annually for inflation using the Special Drawing Rights (SDR) deflator.
5. Q: What is India's current classification?
A: As of 2023, India is classified as a Lower-middle-income economy.
6. Q: How do these classifications affect a country's relationship with the World Bank?
A: These classifications are used to determine lending eligibility from the World Bank. For instance, IDA (International Development Association) loans are primarily available to low-income countries.
7. Q: Can countries move between classifications?
A: Yes, countries can move up or down classifications based on their economic performance. However, to reduce classification changes due to short-term fluctuations, the World Bank uses a three-year average of GNI per capita for the classification.
8. Q: Are there any other factors considered besides GNI per capita?
A: While GNI per capita is the primary criterion, the World Bank also considers other factors like a country's creditworthiness, political risks, and debt sustainability in its overall assessment and engagement with countries.
9. Q: How many countries are in each classification?
A: The number changes each year, but as of 2023, there were 27 low-income economies, 55 lower-middle-income economies, 55 upper-middle-income economies, and 80 high-income economies.
10. Q: Does this classification system have any limitations?
A: Yes, while it's a useful tool, it doesn't capture all aspects of development. It doesn't account for inequalities within countries, non-monetary dimensions of wellbeing, or environmental sustainability.
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