The World Bank Group has reclassified Sri Lanka from a lower-middle-income to an upper-middle-income economy following the country’s strong economic recovery in 2025.
According to the World Bank’s latest annual income classification, Sri Lanka recorded 5 percent real GDP growth in 2025, enabling the country to move into the upper-middle-income category after emerging from the severe economic crisis of 2022.
The World Bank said the reclassification reflects improvements in Sri Lanka’s macroeconomic performance and economic resilience, although the country crossed the income threshold by a relatively narrow margin.
The World Bank classifies economies into four income groups—low-income, lower-middle-income, upper-middle-income, and high-income—based on Gross National Income (GNI) per capita calculated using the Atlas method. The classifications are updated annually.
The Bank noted that Sri Lanka’s recovery was driven by a broad-based rebound across several sectors, including industry, manufacturing, financial services, and tourism, following the unprecedented economic crisis that brought the country to the brink of collapse in 2022.
The reclassification marks a significant milestone in Sri Lanka’s economic recovery and reflects the country’s improved standing within the World Bank’s global income classification framework.
