July 02, Colombo: The World Bank has downgraded Sri Lanka to a lower-middle income country exactly a year after upgrading to an upper-middle income country.

The change in classification is announced in the New World Bank country classifications by income level: 2020-2021 report published on Wednesday (01). The classification is updated each year on July 1.

Sri Lanka is among three economies that are downgraded to a lower category this year while seven countries are moving to a higher category from the previous year.

Algeria and Sudan are the other two countries that have shifted to a lower category along with Sri Lanka.

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 (using the Atlas method exchange rates) of the previous year (i.e. 2019 in this case).

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.