Ukraine Reclassified to Higher Income Category by World Bank

by Roman Cheplyk
Tuesday, July 2, 2024
Ukraine Reclassified to Higher Income Category by World Bank

The World Bank has elevated Ukraine to the category of countries with higher-than-average incomes, as per the 2024 income level classification

This upgrade comes as Ukraine's income per capita increased to $5,070, up from the previous figure of $4,270.

Key Factors for Reclassification:

  1. Economic Recovery in 2023:
    • Ukraine's real GDP grew by 5.3% in 2023, following a significant decline of 28.8% in 2022.
  2. Population Decline:
    • A long-term decline in the population, which has decreased by more than 15% since the Russian invasion, contributed to the reclassification.
  3. Increase in GNI per Capita:
    • The rise in prices of domestically produced goods and services led to an 18.5% increase in nominal gross national income (GNI) per capita.

World Bank Classification:

The World Bank categorizes world economies into four income groups based on GNI per capita:

  • Low income
  • Lower-middle income
  • Upper-middle income
  • High income

These classifications are updated annually on July 1 based on the previous year's data. The classification serves as an indicator of a country's economic development and potential.

Significance of the Reclassification:

  • Economic Development:
    • This reclassification reflects Ukraine's improving economic conditions and development potential.
  • International Perception:
    • Being classified as a higher-income country can positively influence international investment and economic partnerships.
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