World Bank upgrades Sri Lanka to upper middle-income status after 2025 growth rebound

Thursday, 2 July 2026 04:42 - - {{hitsCtrl.values.hits}}

Sri Lanka has been reclassified by the World Bank Group as an upper middle-income country, marking its return to a higher income category following the country’s economic recovery and 5% real GDP growth in 2025.

The upgrade moves Sri Lanka from the lower middle-income category and reflects improvements in macroeconomic performance after emerging from one of the country’s most severe economic crises.

The World Bank updates its country income classifications annually using gross national income (GNI) per capita calculated under the Atlas methodology. Economies are grouped into four categories: low income, lower middle income, upper middle income and high income. The thresholds are also adjusted each year to account for global inflation.

Sri Lanka’s reclassification follows the rebound in economic activity recorded in 2025, with real GDP expanding by 5%, signalling a strengthening of the country’s income level and economic fundamentals after a prolonged period of contraction and macroeconomic adjustment.

While the revised classification reflects higher national income per capita, the World Bank notes that the income groupings are intended for analytical and operational purposes and do not, by themselves, represent a comprehensive assessment of a country’s overall level of development.