Sri Lanka has been reclassified as an upper-middle-income economy by the World Bank Group, marking a significant milestone in the country’s economic recovery and signalling renewed confidence in its growth trajectory.

The latest country income classifications, released on 1 July 2026, assess 218 economies based on Gross National Income (GNI) per capita using the World Bank’s Atlas methodology. Sri Lanka is among five economies upgraded this year from the lower-middle-income category to the upper-middle-income category, alongside Jordan, Micronesia, the Philippines, and Viet Nam.

According to the World Bank, Sri Lanka’s reclassification reflects the country’s remarkable recovery following the unprecedented economic crisis of 2022. The economy recorded real GDP growth of 5 per cent in 2025, supported by a rebound in industrial production, improved performance in the financial sector, and continued expansion of tourism.

The World Bank described Sri Lanka’s progress as a testament to resilience, noting that although the country crossed the upper-middle-income threshold by a relatively narrow margin, the achievement demonstrates the positive impact of ongoing macroeconomic stabilisation and structural reform efforts.

The annual income classifications are updated every 1 July and serve as an important global benchmark for measuring economic development. They are also widely used by international development institutions in determining eligibility for development assistance, concessional financing, and lending frameworks.

Sri Lanka’s return to the upper-middle-income category is expected to strengthen international investor confidence, reinforce the country’s economic credibility, and support its long-term ambition of achieving sustainable and inclusive growth while continuing reforms aimed at enhancing competitiveness, productivity, and fiscal stability.