Africa and Asia see major changes in World Bank income classifications
The income classification of countries by the World Bank has undergone significant changes since the late 1980s, particularly for nations in Africa and Asia.
In 1987, 30% of reporting countries were classified as low-income and 25% as high-income.
A World Bank report suggests that as of 2023, these figures shifted, with only 12% of countries in the low-income category and 40% in the high-income bracket.
In Asia, particularly South Asia, the shift has been notable. In 1987, 100% of South Asian countries were classified as low-income. By 2023, this number has dropped to just 13%, reflecting significant economic growth and development in the region.
Africa has also seen changes, though the trends are more varied. The Middle East and North Africa region, for example, had no low-income countries in 1987, but this has increased to 10% in 2023. This according to the report highlights persistent economic challenges in some parts of the continent despite overall growth.
Changes in these classifications can be attributed to various factors, including economic growth, inflation, exchange rates, and population growth, all of which influence Atlas Gross National Income (GNI) per capita. Additionally, the World Bank adjusts income classification thresholds annually for inflation using the SDR deflator.
A case in point is Algeria, which saw its income classification upgraded in 2023 with a 4.1% economic growth. This reclassification was largely due to a comprehensive revision of national account statistics by the Algerian authorities to align with international standards. This revision resulted in an upward adjustment of the GDP estimates of the country.
The World Bank categorizes global economies into four income groups: low, lower-middle, upper-middle, and high. These classifications are updated annually based on the previous year's GNI per capita, converted to US dollars using the Atlas method.
