Shenzhen – The World Bank has upgraded the income classification status of Zimbabwe, together with two other countries in its latest country classifications by income level: 2019-2020.
According to a blog post, released by the World Bank on 01 July, Zimbabwe has been upgraded from ‘low income’ status (the lowest ranking according to their classification) to ‘low middle income’ status.
“The World Bank classifies the world’s economies into four income groups — high, upper-middle, lower-middle, and low. We base this assignment on Gross National Income (GNI) per capita (current US$) calculated using the Atlas method. The classification is updated each year on July 1st.” reads the first part of the World Bank’s blog post.
Zimbabwe’s GNI rose from $910 as of July 01, 2018, to $1790 as of July 01, 2019. According to The World Bank’s updated thresholds, countries whose GNI was lower than than $1025 as of July 01, 2019 automatically fall into the low income level bracket.
Senegal and Comoros are the other two countries who joined Zimbabwe on the leap from low income to low middle income, though Zimbabwe’s GNI grew slightly greater than that of the other two countries.
In the past, income classifications were meant for analytical purpose only and did not influence the World Bank’s lending terms.
According to the World Bank, this changed in their last fiscal year.
“However, since the last fiscal year, the high-income threshold is also a determining factor for lending rates. Surcharges are applied for lending rates of countries which have been categorized as high income for two consecutive years.”, reads another part of their post.