Own Correspondent

The World Bank has reviewed upwards Tanzania’s economy to a lower middle income country.

The World Bank assigns the world’s economies to four income groups—low, lower-middle, upper-middle, and high-income countries. The classifications are updated each year on July 1 and are based on GNI per capita in current USD (using the Atlas method exchange rates) of the previous year (i.e. 2019 in this case).

The classifications change for two reasons:

In each country, factors such as economic growth, inflation, exchange rates, and population growth influence GNI per capita. Revisions to national accounts methods and data can also influence GNI per capita. The updated data on GNI per capita data for 2019 can be accessed here.

To keep the income classification thresholds fixed in real terms, they are adjusted annually for inflation. The Special Drawing Rights (SDR) deflator is used which is a weighted average of the GDP deflators of China, Japan, the United Kingdom, the United States, and the Euro Area. This year, the thresholds have moved up in line with this inflation measure. The new thresholds (to be compared with GNI per capita in current USD, Atlas method) are as follows.

Changes in classifications
The table below lists the ten economies that are moving to a different category. It is important to emphasize that the World Bank’s income classifications use the GNI of the previous year (2019 in this case). Thus, the GNI numbers that are used for this year’s classification do not yet reflect the impact of COVID-19.

Economies moving to a lower category 

Tanzanian President John Magafuli who rarely writes in English on his social media sites was over the moon with the latest ranking of his country.