By Dr. Gyan Pathak
The latest data updated by the World Bank shows that India did not improve in income classification since 2007, and remains in lower middle income group. In 2025, according to the data, India’s GNI per capita was $2760. In 2007, India’s income classification was upgraded from low income group to lower middle income group.
Number of countries in low income group were 25 in 2025, while lower middle income countries were 47, upper middle income group were 59, and high income group countries were 87. The data clearly shows the deceptive nature of the economic data claimed by the ruling establishment during its political campaign that India is fourth largest economy of the world in nominal terms, with GDP of approximately $4.18 trillion.
This year, none of the countries assessed moved down. Five moved from lower-middle to upper-middle income: Jordan, Micronesia, the Philippines, Sri Lanka, and Viet Nam. However, India could not move up from the lower-middle income group. One moved from low to lower-middle income: Togo. They reached the same thresholds through very different paths.
In South Asia, only Sri Lanka is a story of recovery. Just three years after a severe economic crisis brought the country to the brink of collapse in 2022, real GDP grew by 5% in 2025, driven by a rebound across industries and growth in financial and tourism services. The reclassification is a marker of resilience, though the country only narrowly crossed the threshold.
According the July 1, 2026 classification for the FY27, the countries having less than $1,175 per capital income are classified as low income group, $1176-$4635 as lower middle income group, $4636-$14,375 as upper middle income group, and $14,375 and above as high income group. The incomes are increased compared to July 1, 2025 for all groups for FY26, when low income threshold was less than $1135, lower middle income was $1136-$4495, upper middle income was $4496-$13935 and high income $13935 and above.
Countries are classified each year on July 1, based on the estimate of their GNI per capita for the previous calendar year. Income groupings remain fixed for the entire World Bank fiscal year (i.e., until July 1 of the following year), even if GNI per capita estimates are revised in the meantime.
The World Bank classifies economies for analytical purposes into four income groups: low, lower-middle, upper-middle, and high income. For this purpose it uses gross national income (GNI) per capita data in U.S. dollars, converted from local currency using the World Bank Atlas method, which is applied to smooth exchange rate fluctuations. This year’s edition covers 218 countries, and the results will serve as a global reference until the end of June 2027.
Since 1987, the global income classification landscape has changed significantly, with the share of economies classified as low-income declining from 30% to 11%. These shifts have not been evenly distributed, however, with some countries moving across income groups much faster than others.
This year’s update to the World Bank Group Country Income Classifications shows six countries moved to a higher income category, but each has a different story to tell: a country emerging from economic crisis, an export powerhouse outpacing its peers, and an economy that turned out to be 10% larger than previously thought are just three of them.
The update matters because the classifications inform which countries can access concessional loans and development assistance, and help governments, researchers and a wide range of international organizations track economic progress worldwide.
Estimates of GNI are obtained from economists in World Bank country units who rely primarily on official data published by the countries; the size of the population is estimated by World Bank demographers from a variety of sources, including the UN’s biennial World Population Prospects.
The Country Income Classifications’ methodology is rigorous. Each round, the latest data available is used to ensure categorizations reflect the most accurate picture, but no single measure can fully capture the complexity of a country’s development.
However, over the past four decades, thousands of data points have been analyzed annually to produce the classifications, and the number of economies assessed has increased gradually — in 1987, 163 countries were included in the list, in 2025, 218 — which make the Country Income Classifications a reliable tool to contextualize the global economy, to understand where countries have been, and to some extent, the direction they are heading to. (IPA Service)
