Question

How does the World Bank classify countries in terms of economic categories?

Short answer

The World Bank classifies countries into four economic categories based on Gross National Income (GNI) per capita: Low income, Lower-middle income, Upper-middle income, and High income. Countries are grouped into these categories according to their GNI per capita, and the examples of countries in each category include Somalia for Low income, India for Lower-middle income, China for Upper-middle income, and Germany for High income.

Step-by-step solution

Identifying the Classification Categories

The World Bank has a classification system for economies which are splitted into four income categories. These are: Low income, Lower-middle income, Upper-middle income, and High income.

Understanding the Criteria

The classification is based on Gross National Income (GNI) per capita, which is the total amount a country earns divided by its population. These income thresholds are adjusted annually considering the world’s economic conditions.

Providing Examples for Each Category

Examples of countries in each category according to World Bank classification (as of 2021) can include: Low income countries (e.g.,Afghanistan, Somalia), Lower-middle-income countries (e.g., India, Nigeria), Upper-middle-income countries (e.g., China, Brazil) and High-income countries (e.g.,United States, Germany).