The World Bank has retained Nepal in the lower middle-income category, with the country failing to achieve sufficient growth in per capita income to move to a higher income group.
In its annual income classification of 218 economies, released on July 1, the World Bank stated that Nepal continues to remain in the lower middle-income bracket after being upgraded from the low-income category in 2020.
The World Bank updates its income classifications every year based on a country’s Gross National Income (GNI) per capita from the previous year, measured in US dollars.
According to the revised 2026 thresholds, countries with a GNI per capita of up to USD 1,135 are classified as low-income economies, while those with incomes between USD 1,136 and USD 4,495 fall into the lower middle-income category. Economies with per capita incomes ranging from USD 4,496 to USD 13,935 are categorized as upper middle-income, while countries with incomes above USD 13,935 are considered high-income economies.
The World Bank noted that a country’s income classification reflects its level of economic development and also influences its access to official development assistance, concessional financing, and other forms of international support.
Within South Asia, Afghanistan remains the region’s only low-income country. Nepal, Bangladesh, Bhutan, Pakistan, and India continue to be classified as lower middle-income economies, while Sri Lanka and the Maldives remain in the upper middle-income category.
Although Nepal has maintained its lower middle-income status for five consecutive years, the latest classification indicates that the country’s per capita income has yet to rise sufficiently to qualify for the next income bracket, highlighting the need for sustained economic growth, higher productivity, and stronger income generation.
