By Stanley James, Business Editor
THE World Bank has classified Zimbabwe as a lower middle income economy, giving credence to the country’s vision of attaining an upper middle income society by 2030.
After upgrading Zimbabwe’s status from a low income ranking to a lower middle income society in 2020, the country has maintained the current trend as confirmed by the World Bank.
The global financial institution says the obtaining situation and that of other countries which came into effect on the first of this month will remain fixed for 12 months regardless of economic growth revisions.
Economists have since aired their views on the latest development with Dr Prosper Chitambara stressing that economic confidence is critical.
“More needs to be done despite the fact that the nation was not either lowered or adjusted downwards. Remember there are many shocks such as inflation, supply chains that are not only affecting Zimbabwe, but the whole world so it means a lot needs to be done by the government to consolidate the current income status, while focusing on stability, reduction of prices and stabilising the exchange rates for the betterment of citizens livelihoods,” he said.
Chartered Accountancy and Governance Institute in Zimbabwe Chief Executive Officer, Dr Lovemore Gomera gave an insight on what needs to be done as the country targets to achieve an upper middle income society by 2030.
“The improvement in the status is a welcome development, but it means nothing if most of the population is still facing challenges due to inflationary pressures that have scaled downwards income levels and increased income inequality between the rich and poor,” noted Gomera.
Low income economies are defined as those with a Gross National Income (GNI) per capita calculated using the World Bank Atlas Method of $US1 000 or less.
Low middle income economies are those with a GNI per capita of between $US1 086 and at least US$4 000.
Upper middle income economies are those with GNI per capital of between $US4 256 and up to over US$13 000.
Haiti, Moldova and Tajikistan saw their status category moving upwards with Belize, Indonesia, Iran, Mauritius and Romania moving to lower income classification groups.
The rankings are based on Gross National Income ( GNI) per capita which the world bank refers to the gross amount of money by a nation’s people and businesses converted to US dollars using the institution’s atlas method, divided by the mid year population.
The classification of countries is determined by two factors that include a country’s GNI per capita, which can change with economic growth, inflation, exchange rates and population.
Revision of national accounts methods and data can also affect the GNI per capita.
Review of the country’s accounts and inflation affects GNI per capita thresholds where they are adjusted for inflation yearly.