World Bank income classification

Every year on 1 July the World Bank sorts the world's economies into four groups by how much income each has per person: low, lower-middle, upper-middle and high. The measure is gross national income per head, which is everything a country's residents earn at home and abroad, divided by the population and converted into US dollars by a method that smooths exchange rates over three years. For the year running to June 2027 the cut-offs are 1,175 dollars or less for low income, 1,176 to 4,635 for lower-middle, 4,636 to 14,375 for upper-middle, and more than 14,375 for high income.

The groups are categories with fixed edges, not descriptions, and that is where they are easy to misread. A country can cross a threshold without much changing on the ground, because the cut-offs are adjusted every year for inflation and a currency can move faster than an economy. Membership then holds for the whole financial year even if the underlying income estimates are later revised. So a figure quoted for low-income countries in one year is an average over a slightly different set of countries than the same figure a few years earlier, which matters whenever such averages are compared over time. The grouping also moves real money: the poorest countries qualify for the World Bank's cheapest lending, so crossing a threshold changes what a government can borrow and on what terms.