Sri Lanka Regains Upper-Middle-Income Status as World Bank Reclassifies Nations

The World Bank’s July 1 2026 income‑classification update upgraded Sri Lanka to upper‑middle‑income status, marking its return to the category after a severe economic crisis that culminated in a sovereign default in 2022. The bank noted a 5 % real GDP expansion in 2025, driven by rebounds in tourism, financial services and broader industry, and an 11.2 % rise in per‑capita gross national income that narrowly crossed the $4,696 threshold.

Among the six economies moving up, Sri Lanka joins Vietnam, the Philippines, Jordan, the Federated States of Micronesia and Mayotte (which moved to high‑income). In contrast, India remains classified as lower‑middle‑income, with a 2025 GNI per capita of $2,760, well below the $4,696 cut‑off. The World Bank highlighted India’s ongoing challenge of accelerating growth to reach high‑income status by 2047.