Sri Lanka reclassified as an Upper-Middle-Income Country by the World Bank

According to the latest country income classifications released by the World Bank Group on 1 July 2026, Sri Lanka has been upgraded from a Lower-Middle-Income Country to an Upper-Middle-Income Country.

The updated classification covers 218 economies. Alongside Sri Lanka, Jordan, Micronesia, Philippines and Vietnam have also moved from the lower-middle-income category to the upper-middle-income category. Meanwhile, Togo has advanced from the low-income category to the lower-middle-income category.

The World Bank noted that, although these countries crossed the same income threshold, each followed a distinct economic path.

Sri Lanka’s reclassification reflected its recovery from the severe economic crisis of 2022, with real GDP expanding by 5 per cent in 2025, supported by a rebound across industries and growth in the financial and tourism sectors.

Viet Nam’s progress was driven by export-led growth, the Philippines benefited from broad-based expansion across all major sectors, Micronesia recorded modest but steady post-pandemic growth, while Jordan’s reclassification followed a comprehensive revision of its national accounts, which revealed that its economy was nearly 10 per cent larger than previously estimated.

Togo, meanwhile, moved into the lower-middle-income category largely as a result of revised population estimates, together with economic growth and exchange-rate movements.

The income classifications are updated annually on 1 July and are based on the previous year’s Gross National Income (GNI) per capita. Countries are grouped into four categories: low income, lower-middle income, upper-middle income and high income.

The World Bank stated that these classifications serve as an important tool for determining eligibility for concessional financing and development assistance, while also providing governments, researchers and international organisations with a valuable indicator for assessing global economic progress.

The World Bank further noted that no country was downgraded to a lower income category in this year’s classification.

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