Sri Lankans are now richer than Indians? Surprise in the new report of the World Bank

Sri Lanka’s battered economy is slowly recovering. The World Bank has published a report on the country’s economy. After years of economic turmoil, the island nation has regained the status of an ‘upper-middle income’ country. This is a major milestone after Sri Lanka’s severe economic crisis

Along with Sri Lanka, Vietnam, the Philippines, Jordan and the Federated States of Micronesia have moved from ‘lower middle income’ (lower-middle income) to ‘upper-middle income’ (upper-middle income) country status.

According to the World Bank, Sri Lanka’s improvement in the World Bank ranking is due to its recovery from the severe financial crisis it faced.

Sri Lanka’s real GDP growth rate in 2025 was 5 percent. The country’s gross domestic product (GDP) also grew by 11.2 percent. The World Bank said the improvement was due to increased economic activity, lower inflation and a stable exchange rate. As a result, Sri Lanka’s GNI per capita exceeds that of upper-middle income countries.

According to the latest World Bank update, India remains a lower middle income country despite being one of the fastest growing major economies in the world. So despite being the world’s fourth largest economy, why is India lagging behind Sri Lanka?

Because the World Bank uses GNI per capita as the base, not total GDP. Although the size of India’s economy is one of the largest in the world, the average per capita income is still below the threshold for upper-middle income countries because that income is distributed among a population of more than 1.4 billion.

Economists believe that India can attain the status of an upper-middle income country in the next decade if economic growth outpaces population growth in the coming years and per capita income rises consistently.