The World Bank has downgraded Sri Lanka from upper-middle income country to lower-middle income country category.
The World Bank assigns the world’s economies to four income groups—low, lower-middle, upper-middle, and high-income countries. The classifications are updated each year on July 1 and are based on GNI per capita in current USD of the previous year.
The classifications change for two reasons:
- In each country, factors such as economic growth, inflation, exchange rates, and population growth influence GNI per capita. Revisions to national accounts methods and data can also influence GNI per capita.
- To keep the income classification thresholds fixed in real terms, they are adjusted annually for inflation. The Special Drawing Rights (SDR) deflator is used which is a weighted average of the GDP deflators of China, Japan, the United Kingdom, the United States, and the Euro Area. This year, the thresholds have moved up in line with this inflation measure.
For more information: https://blogs.worldbank.org/opendata/new-world-bank-country-classifications-income-level-2020-2021