Jordan Country Reclassification – Questions and Answers

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On July, 2017, the World Bank published its update on the classification of the world’s economies. This update happens every year on the same date, and is based on revised data for the previous year’s gross national income, or GNI. In the most recent update, Jordan has been reclassified from upper-middle-income to lower-middle-income. Here are some answers on the reasons for the reclassification and its implications.

  • What changed on July 1, 2017 when it comes to Jordan’s country classification?

The World Bank groups the world’s economies into four categories on the basis of income per capita — high, upper-middle, lower-middle, and low.  Each year on July 1st, the classifications are updated based on new income per capita data for countries, and changes to the thresholds that separate the categories which are adjusted for inflation. 

On July 1, 2016, the World Bank classified Jordan as an upper middle income country. Based on new data, on July 1, 2017, the World Bank classified Jordan as a lower middle income country. 

  • What are the World Bank income classifications used for?

The Bank uses the income classifications for analytical purposes – when reports and statistics are published, the income classifications offer a convenient way of grouping similar countries for analysis and comparison.

  • Why has the WB decided to reclassify Jordan from an upper middle income country to a lower middle income country?

Classifications are based on the previous year’s GNI per capita estimates.  As shown in the tables below, the estimate for Jordan’s 2016 GNI/capita places it in this year’s Lower-middle income group. Last year’s classification based on the 2015 GNI/capita estimate placed it in the Upper-middle-income group.

This year’s downward revision of GNI/capita is driven by three factors: an upward revision of Jordan’s population in new population data published by the UNPD; a slowdown in real GDP growth; and low inflation.

 

Old group

New group

GNI/Capita/$ (2015) as of July 1, 2016

GNI/Capita/$ (2016) as of July 1, 2017

Jordan

Upper-middle

Lower-middle

4,680

3,920

Threshold

July 2016/$ (old)

July 2017/$ (new)

Low-income

< 1,025

< 1,005

Lower-middle income

1,026 – 4,035

1,006 – 3,955

Upper-middle income

4,036 – 12,475

3,956 – 12,235

High-income

> 12,475

> 12,235

 

  • What does this mean for World Bank lending to Jordan? 

The World Bank does not use these income classifications for lending or operational decisions. The GNI per capita estimates are one of several factors including credit worthiness and the policy and institutional environment which inform lending criteria. Jordan remains an IBRD eligible country.

  • Have refugee figures been included in Jordan’s population estimate?

The UNPD calculates the estimate for Jordan’s de facto population and as noted in their documentation for Jordan  they take into account official estimates from the Jordanian government, and the latest 2015 census, as well estimates for international migration along with UNHCR’s estimates for refugees.

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