Question

Why do we need to classify countries into different income slabs?

Answer 1

In the World Development Indicators database (and most other time series datasets), all 189 World Bank member countries, plus 28 other economies with populations of more than 30,000, are classified so that data users can aggregate, group, and compare statistical data of interest, and for the presentation of key statistics. The main classifications provided are by geographic region, by income group, and by the operational lending categories of the World Bank Group. These groupings change from time to time: these tables provide those currently in use.

The term country, used interchangeably with economy, does not imply political independence but refers to any territory for which authorities report separate social or economic statistics.

Geographic regions

Groupings are primarily based on the regions used for administrative purposes by the World Bank. There are two main variants: one which includes all economies, and one which excludes high-income economies (see income groups below for the definition of low-, lower middle-, upper middle-, and high-income categories).

Income groups

Economies are currently divided into four income groupings: low, lower-middle, upper-middle, and high. Income is measured using gross national income (GNI) per capita, in U.S. dollars, converted from local currency using the World Bank Atlas method. Estimates of GNI are obtained from economists in World Bank country units; and the size of the population is estimated by World Bank demographers from a variety of sources, including the UN’s biennial World Population Prospects.

Countries are immediately reassigned on July 1 each year, based on the estimate of their GNI per capita for the previous calendar year. Income groupings remain fixed for the entire fiscal year (i.e., until July 1 of the following year), even if GNI per capita estimates are revised in the meantime.

See “How are the income group thresholds determined?”

See “Why use GNI per capita to classify economies into income groupings?”

Download an Excel file of historical classifications by income.