The World Bank’s income classification system remains a key tool for comparing countries by income. Updated annually, it sorts countries into four groups based on gross national income (GNI) per capita. This system helps researchers and policymakers understand global economic diversity clearly and consistently. In 2024, the World Bank continued to classify countries into low, lower-middle, upper-middle, and high-income groups. These categories are based on fixed income thresholds adjusted yearly for inflation. Over the past two decades, many countries have shifted upward in income groups, reflecting economic growth. However, some have moved downward due to conflicts or crises.
Gross National Income Per Capita
GNI per capita measures the average income of a country’s residents, including income earned abroad. It is reported in local currency and converted to US dollars using exchange rates. This standardisation allows for consistent comparison across countries. The World Bank uses GNI per capita as the sole criterion for income classification.
Income Group Thresholds
The income groups are defined by fixed thresholds in US dollars. As of 2024, these are:
- Low income – $1,135 or less
- Lower-middle income – $1,136 to $4,495
- Upper-middle income – $4,496 to $13,935
- High income – More than $13,935
These thresholds are updated annually based on global inflation rates but remain absolute, not relative to other countries’ incomes.
History and Purpose of Classification
The system began in the late 1980s to guide lending policies. The low-income threshold marked eligibility for concessional loans. Additional thresholds were introduced to better distinguish countries by income distribution. Today, the classification is independent of lending rules and serves mainly for statistical and policy analysis.
Country Movements Between Groups
Countries can move between income groups as their GNI per capita changes. Growth, currency fluctuations, and population updates influence these shifts. Most nations have risen over time due to economic development. However, some like Syria and Yemen have fallen due to war and economic crises, moving from lower-middle to low income.
Population Distribution Across Income Groups
Population shares in each income group are uneven. In 2004, 37% lived in low-income countries; by 2024, this fell below 10%. The share in upper-middle income countries rose from under 10% to 35%. This reflects global economic progress but also marks disparities in wealth distribution.
