Economy News Sri Lanka: The World Bank has downgraded Sri Lanka from an upper-middle income country to a lower-middle income one from 1 July.
The move comes under the World Bank’s 2020-2021 country classification by income level, exactly a year after Sri Lanka was classified as an upper-middle income category.
The world’s economies are assigned into four income groups—low, lower-middle, upper-middle, and high-income countries by the World Bank.
The classifications are updated each year on 1 July and are based on GNI per capita in current US Dollar (using the Atlas method exchange rates) of the previous year.
Sri Lanka is among 10 economies that are moving to a different category this year and is one of three countries that are moving to a lower category from the previous year. Algeria and Sudan are the other two countries moving to a lower category along with Sri Lanka.
The World Bank said Sri Lanka was downgraded as a lower-middle income country after it recorded $ 4,020 per capita income for 2020, in comparison to the $4,060 last year, which resulted in the country being classified in the upper-middle income category in 2019.
For the current 2021 fiscal year, low-income economies are defined as those with a GNI per capita, calculated using the World Bank Atlas method, of $ 1,035 or less in 2019; lower middle-income economies are those with a GNI per capita between $ 1,036 and $ 4,045; upper middle-income economies are those with a GNI per capita between $ 4,046 and $ 12,535; high-income economies are those with a GNI per capita of $ 12,536 or more.
The World Bank also noted that the GNI numbers that were used for this year’s classification did not yet reflect the impact of the COVID-19 pandemic.