Sri Lanka has been reclassified as an upper-middle-income economy by the World Bank Group in its latest country income classifications released on July 1, 2026, marking a significant milestone in the country's economic recovery.
The annual classification, which assesses 218 economies based on Gross National Income (GNI) per capita using the World Bank’s Atlas methodology, placed Sri Lanka among five countries that moved from the lower-middle-income category to the upper-middle-income category this year. Jordan, Micronesia, the Philippines, and Viet Nam also achieved the upgrade.
According to the World Bank, Sri Lanka’s reclassification reflects the country’s strong recovery from the severe economic crisis of 2022. Just three years after facing one of the worst economic downturns in its history, Sri Lanka recorded real GDP growth of 5 percent in 2025, supported by a rebound in industrial activity and growth in the financial and tourism sectors.
The World Bank described Sri Lanka’s progress as a story of resilience, noting that while the country crossed the upper-middle-income threshold by a narrow margin, the achievement demonstrates the effectiveness of ongoing economic stabilization and recovery efforts.
The World Bank updates its income classifications annually on July 1. These classifications serve as an important global benchmark for measuring economic progress and play a key role in determining eligibility for development assistance and concessional financing.
