The World Bank recently published its updated country classifications by income level for 2022-2023 according to data from 2021. In details, the World Bank updates its classification on July 1 of each year. In 2022, the World Bank assigned 217 countries to four income groups based on their 2021 Gross National Income (GNI) per capita, with 80 countries falling in the “High Income” category, 54 in the “Upper-Middle Income” category, 51 in the “Lower-Middle Income” category and 26 in the “Low Income” category. More specifically, GNI measures are expressed in US Dollars and are determined by conversion factors adopted by the World Bank’s “Atlas” method which effectively “smoothes” fluctuations in the exchange rate by means of a three-year price-adjusted moving average factor.

According to the World Bank, changes in classifications happen for two reasons:

1-    Changes to Atlas GNI per capita which includes factors such as economic growth, inflation, exchange rates, and population growth, not to mention revisions to improve national accounts estimates and methods which can influence the GNI per capita

2-    Changes to classification thresholds that are adjusted for inflation on an annual basis using the Special Drawing Rights (SDR) deflator (which is a weighted average of the GDP deflators of China, Japan, the United Kingdom, the United States, and the Euro Area)

In this vein, the four income groups for the Atlas GNI per capita are shown in the below table:

According to the World Bank, the Europe & Central Asia region had the best performances in terms of Income with 38 countries falling under the “High Income” category and 16 categorized as “Upper Middle Income” countries. The Europe & Central Asia region was followed by the Latin America & Caribbean region (17 “High Income” and 19 “Upper Middle Income”), East Asia & Pacific (14 “High Income” and 9 “Upper Middle Income”) and the Middle East & North Africa Region (8 “High Income” and 3 “Upper Middle Income”). On the other hand, the Sub-Sahara Africa region hosted the highest number of “Low Income” countries (24) and “Lower Middle Income” (17).

Furthermore, the World Bank moved three economies to a higher income group and three other economies to a lower income group as depicted in the below table:

Concerning Lebanon, the World Bank noted that the country’s real GDP per capita fell for the eleventh consecutive year in 2021, with the country experiencing a sizeable exchange rate devaluation. In this vein, Lebanon, which was categorized as an “Upper-Middle Income” country for almost 25 years, was moved into the “Lower-Middle Income” category.