Income classification to group countries was firstly introduced by the World Bank 25 years ago. The World Bank divides the world economies into four distinct groups – Low, Lower-Middle, Upper-Middle, and High – based on the Gross National Income (GNI) per capita converted to current US dollars.
New thresholds are determined directly by the World Bank every year. For the fiscal year 2016, the new thresholds by income were classified according to specific levels of GNI in current US$ as following:
Low-income threshold for GNI lower than $1,045
Lower-Middle income for GNI between $1,045 and $4,125
Upper-Middle income for GNI between $4,125 and $12,736
High-income for GNI greater than $12,736
Focus on Asia
The economic outlook of Asia remains the strongest and fastest in the world, its distribution of income among Asian economies concentrates mainly on the lower-middle, upper-middle and high income, respectively 17, 12 and 15 countries.
Specifically, fastest growing economies such as India and Bangladesh in South Asia, Vietnam and Lao P.D.R among ASEAN countries, Armenia, Tajikistan, Uzbekistan and Kirgizstan in Central Asia are currently classified as lower-middle income countries. On the other hand, fast growing economies in Asia with an upper-middle income are countries such as China, Kazakhstan, Mongolia and Thailand.
High income countries in Asia are, for example, the Four Tiger Economies (South Korea, Hong Kong, Singapore and Taiwan), other developed economies such as Japan, BRICS economies such as the Russian Federation, and Middle-Eastern countries such as Saudi Arabia, Qatar, Oman, United Arab Emirates and Israel.
According to the World Bank, Asian countries classified as low income are only four and includes Afghanistan, North Korea, Cambodia and Nepal with the last two being among the top-10 fastest growing economies in Asia.