World Bank Income Classification, 2026

Why in News?

Recently, the Development Data Group of the World Bank Group (WBG) released its annual Country Income Classifications for the fiscal year 2026–2027.

Methodology

• The classifications are based on Gross National Income (GNI) per capita estimates from the previous calendar year (2025).
• The Conversion Mechanism (The Atlas Method)- To smooth out impacts from short-term exchange rate fluctuations, the World Bank uses the Atlas conversion factor.
• This method applies a 3-year moving average of inflation-adjusted exchange rates to convert local currencies into US Dollars.

4-Tier Division

Key Findings

• Elevation of nations - The updated figures show that 6 countries moved into higher income categories, while 0 countries moved down.
• 5 moved from lower-middle to upper-middle income - Jordan, Micronesia, the Philippines, Sri Lanka, and Viet Nam.
• 1 moved from low to lower-middle income - Togo. They reached the same thresholds through very different paths.

• Long-Term Global Shifts - The proportion of economies classified as low-income has shrunk from 30% to just 11% in 2026.
• Implications - These categories influence whether a country can access concessional financing and development assistance from multilateral lenders.   

Reference
World Bank Blogs | World Bank Group Country Income Classifications