Six countries have recently advanced to a higher income classification in the latest update from the World Bank, indicating multiple pathways for economic progression. While some nations achieved this through robust economic growth, others benefited from improved statistical data or adjustments in population figures. In contrast, India continues to remain in the lower-middle-income category.

Every year on July 1, the World Bank’s Development Data Group revises the income classifications of economies based on their Gross National Income (GNI) per capita from the previous calendar year. The current edition, which covers 218 economies, will be the global reference until June 2027.

The World Bank classifies countries into four categories: low income, lower-middle income, upper-middle income, and high income. These classifications serve important purposes beyond mere comparison; they assist governments, researchers, and international organisations in assessing economic progress and determining eligibility for concessional loans and development aid.

Countries That Climbed the Income Ladder

This year saw no countries relegated to a lower income category, but six nations improved their standings. Jordan, Micronesia, the Philippines, Sri Lanka, and Vietnam ascended from the lower-middle-income group to the upper-middle-income category, while Togo progressed from low income to lower-middle income.

Each of these countries followed a distinct path to achieve their new classifications. Vietnam’s advance was propelled by significant export-driven growth, recording export increases exceeding 15 per cent in both 2024 and 2025, while its economy expanded by 7 per cent and 8 per cent during those years. From 2021 to 2025, its GNI grew at an average rate of 10 per cent annually, placing it among the strongest performers in the region.

The Philippines’ promotion to upper-middle income came after broad-based economic growth across various sectors. The economy experienced an average annual growth rate of 5.8 per cent over the last five years, supported by progress in manufacturing, services, and other key areas.

Sri Lanka’s upgrade is notable, occurring just three years after experiencing one of its most severe economic crises. Following a significant financial collapse in 2022, the economy rebounded, with real GDP growing by 5 per cent in 2025, aided by recoveries in industry, financial services, and tourism.

India’s Position in Global Income Classification

Despite its rapid economic advancement, India remains in the lower-middle-income category. The latest World Bank classification reveals that India’s GNI per capita is still below the threshold necessary for advancement to the upper-middle-income group.

India has recorded solid economic growth in recent years, establishing itself as one of the fastest-growing major economies globally. However, due to its large population, GNI per capita remains below the required level for reclassification.

For India to transition to the upper-middle-income category, ongoing economic growth coupled with a more rapid increase in per capita income will be essential. Although significant progress has been made over the last decade, India has not yet surpassed the World Bank’s income threshold for advancement to the next classification.

In summary, while several countries have successfully improved their economic status, India remains challenged by its population size and the associated income levels. The country’s strategy for future growth and development will play a crucial role in determining its economic classification in the coming years.

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