The World Bank has classified Laos as a lower-middle-income economy in its latest classification for the 2020 fiscal year.
The bank classifies the world’s economies into four income groups, namely high, upper-middle, lower-middle, and low, based on Gross National Income (GNI) per capita in U.S. dollars.
Lower middle-income economies are those with a GNI per capita between USD 1,026 and USD 3,995.
The World Bank decides such classifications by two factors: a country’s GNI per capita and classification threshold.
A country’s GNI per capita can change with economic growth, inflation, exchange rates, and population, while the thresholds are adjusted for inflation annually using the SDR deflator, which is determined by summing the values in U.S. dollars, based on market exchange rates, of a basket of major currencies, the U.S. dollar, Euro, and Japanese yen.
The threshold for the upper-middle-income classification is USD 3,996 and USD 12,375, while that for the high-income classification is more than USD 12,375.
The classification tables include all World Bank members, plus all other economies with populations of more than 30,000, according to the bank.
The term country is used interchangeably with economy and does not imply political independence but refers to any territory for which authorities report separate social or economic statistics, it added.