Skip to Main Navigation

The World Bank's classification of countries by income (English)

The World Bank has used an income classification to group countries for analytical purposes for many years. Since the present income classification was first introduced 25 years ago there has been significant change in the global economic landscape. As real incomes have risen, the number of countries in the low income group has fallen to 31, while the number of high income countries has risen to 80. As countries have transitioned to middle income status, more people are living below the World Bank's international extreme poverty line in middle income countries than in low income countries. These changes in the world economy, along with a rapid increase in the user base of World Bank data, suggest that a review of the income classification is needed. A key consideration is the views of users, and this paper finds opinions to be mixed: some critics argue the thresholds are dated and set too low; others find merit in continuing to have a fixed benchmark to assess progress over time. On balance, there is still value in the current approach, based on gross national income per capita, to classifying countries into different groups. However, the paper proposes adjustments to the methodology that is used to keep the value of the thresholds for each income group constant over time. Several proposals for changing the current thresholds are also presented, which it is hoped will inform further discussion and any decision to adopt a new approach.


  • Author

    Fantom,Neil James, Serajuddin,Umar

  • Document Date


  • Document Type

    Policy Research Working Paper

  • Report Number


  • Volume No


  • Total Volume(s)


  • Country


  • Region

    The World Region,

  • Disclosure Date


  • Disclosure Status


  • Doc Name

    The World Bank's classification of countries by income

  • Keywords

    Gross National Income Per Capita;market exchange rate;Upper Middle Income Countries;consumption of fixed capital;purchasing power parity;average exchange rate;extreme poverty line;classification of country;gross national product;official exchange rate;standard of living;international bidding process;fragile and conflict;panel of expert;poverty incidence rate;secondary school enrollment;per capita income;list of countries;international financial transaction;exchange rate volatility;rate of inflation;basket of currency;global economic landscape;millennium challenge;middle income category;fight against poverty;resource allocation decision;exchange rate instability;data collection process;graduation from ibrd;high income economy;access to financing;measure of inflation;impact of inflation;income threshold;conversion factor;country classification;Exchange Rates;classification system;average inflation;weighted average;international inflation;common currency;constant price;civil works;current income;data availability;population estimate;price inflation;world income;gdp deflator;base year;government productivity;gnp deflator;national account;subsistence activities;estimation method;real income;national currency;internal capacity;data quality;Borrowing Countries;currency conversion;policy target;international standard;short-term volatility;social indicator;international obligation;production cost;price rise;government service;market equivalent;productivity level;voting power;price level;capital flow;average period;resident population;foreign debt;fund allocations;skilled staff;population survey;downward bias;poverty headcount;world market;arbitrary choice;reference currency;development partner;rank correlation;government sector;political change;International Trade;intermediate consumption;early warning;economic shock;repayment terms;preferential duties;classification scheme;extensive use;domestic economy;domestic activity;multilateral agency;inflation measure;domestic contractor;historical data;industrialized economy;classification change;global context;eligibility threshold;comparable basis;Trade Policies;Trade Policy;tied aid;financial contribution;european commission;summary statistic;press release;adjustment factor;data compilation;economic census;proxy measure;operational use;multidimensional index;global economy;alternative measure;aid allocation;methodological issue;global poverty;relative ranking;nonincome dimension;international comparability;national gdp;empirical work;development policy;open access;world economy;preferential trade;bilateral aid;news media;population number;business community;operational activity;determining eligibility;statistical system;inflation rate;national accounting;population data;french franc;sample survey;response rate;eradicating poverty;increasing share;income figure;informal activity;



Official version of document (may contain signatures, etc)

  • Official PDF
  • TXT*
  • Total Downloads** :
  • Download Stats
  • *The text version is uncorrected OCR text and is included solely to benefit users with slow connectivity.


Fantom,Neil James Serajuddin,Umar

The World Bank's classification of countries by income (English). Policy Research working paper,no. WPS 7528 Washington, D.C. : World Bank Group.