World Bank downgrades only Namibia in latest global review

Justicia Shipena 

Namibia has been downgraded from an upper-middle-income to a lower-middle-income country, according to the World Bank’s latest income classification update released this week.

Namibia is the only country whose classification moved downward in the 2024 update. 

The downgrade follows changes in Gross National Income (GNI) per capita, which the World Bank uses to group countries into four categories, low, lower-middle, upper-middle, and high income. 

Every year on July 1, the World Bank makes these updates using the previous year’s GNI data and the Atlas method, which smooths exchange rate fluctuations.

The World Bank said Namibia’s GNI per capita dropped by 12.9% due to a 13.8% upward revision in population estimates by the United Nations Population Division for 2023.

In 2024, Namibia’s GDP grew by 3.7%, a slowdown from 4.4% in 2023. Inflation, based on the GDP deflator, declined from 6.6% in 2023 to 3.3% in 2024.

A key factor behind the weaker growth was a steep drop in the mining and quarrying sector. 

The sector, which grew by 19.3% in 2023, contracted by 1.2% in 2024 due to lower global demand for diamonds.

The World Bank says these income classifications help track global economic changes and shape development strategies. 

“Understanding the factors influencing income classification can guide efforts stimulating economic growth, help manage inflation, and enhance integration into the global economy.”

It also recommended that policymakers use the classifications to guide economic policy and planning.

Globally, the World Bank reported regional shifts over time. 

In East Asia and the Pacific, the share of low-income countries dropped from 26% in 1987 to 3% in 2024. 

In Europe and Central Asia, there were no low-income countries in both 1987 and 2024, though high-income countries declined slightly from 71% to 69%.

In Latin America and the Caribbean, low-income countries dropped from two in 1987 to none in 2024, while high-income countries rose from 9% to 46%. In South Asia, all countries moved out of the low-income category.

In Sub-Saharan Africa, the proportion of low-income countries declined from 75% to 45%, with one country reaching high-income status.

The income thresholds used for the classifications are adjusted annually for inflation using the Special Drawing Rights (SDR) deflator. 

While thresholds typically increase, the 2024 adjustment saw them move slightly downward due to the strengthening of the U.S. dollar against other currencies.

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