World Bank Updates Global Income Classifications for FY26
The World Bank has announced new income classifications for countries that will take effect from July 1, 2025 (FY26), based on 2024 Gross National Income (GNI) per capita. These thresholds, updated annually, determine how countries are grouped into low, lower-middle, upper-middle, and high-income economies. The changes, though small, influence how global economic trends are analyzed and how financial aid or development policies are applied.
Under the new classification, countries with a per capita GNI of US$1,135 or less will fall into the low-income category. Economies with a per capita GNI between US$1,136 and US$4,495 will be considered lower-middle income, while those between US$4,496 and US$13,935 are classified as upper-middle income. Nations whose per capita GNI exceeds US$13,935 will be designated as high-income economies.
These figures represent a slight downward adjustment from the thresholds used in FY25. Previously, countries with US$1,145 or less were classified as low-income; US$1,146 to US$4,515 as lower-middle income; US$4,516 to US$14,005 as upper-middle income; and over US$14,005 as high-income. This recalibration reflects updated global data and shifts in exchange rates, inflation, and purchasing power parity across economies.
The World Bank’s income classification system is a widely used benchmark for comparing development levels worldwide. It also helps inform decisions by donors, investors, and policymakers about where to focus assistance and investment. Although the differences in thresholds for FY26 are modest, they can affect how countries are perceived internationally and which funding opportunities they are eligible for.
By updating these benchmarks annually, the World Bank aims to provide a clearer, more accurate picture of changing economic conditions across the globe. For countries hovering near the edge of a classification band, these shifts can mean moving up or down a category, which in turn influences foreign aid, credit ratings, and development priorities.
