Bulgaria Joins Club of Richest Countries in the World

Bulgaria has been steadily approaching the high-income threshold with modest growth throughout the post-pandemic recovery period, which continued in 2023 as real GDP grew 1.8%, supported by consumption demand, according to the World Bank.

In its country classifications by income level for 2024-2025, the World Bank said that along with Bulgaria, Palau and Russian Federation to have been moved from the upper-middle-income to the high-income category.

The World Bank Group divides world economies into four groups according to gross national income (GNI) per capita – low-income, lower-middle, upper-middle and high-income countries. Until now, Bulgaria was among the countries with a high average income. The highest group has an annual income of more than $14,006 per capita.

Palau continued its post-pandemic recovery as GDP returned to previous levels, growing by 0.4% in real terms. With inflation (as measured by the GDP deflator) at 8.1%, nominal GNI increased 10.0%, World Bank said.

Economic activity in Russian Federation was influenced by a large increase in military related activity in 2023, while growth was also boosted by a rebound in trade (+6.8%), the financial sector (+8.7%), and construction (+6.6%).

“These factors led to increases in both real (3.6%) and nominal (10.9%) GDP, and Russia’s Atlas GNI per capita grew by 11.2%,” World Bank said.

Four Countries Move Up

Four countries – Algeria, Iran, Mongolia, and Ukraine – have moved up from the lower-middle-income to the upper-middle-income category this year.

While the Algerian economy grew 4.1% in 2023, the main reason for the upward reclassification was a comprehensive revision to national accounts statistics undertaken by the Algerian authorities (Office National des Statistiques) to align with current international standards.

This realignment resulted in an upward revision to the level of GDP (on average 13.3% higher over the 2018-2022 period) due, for example, to the expansion of investment estimates to include research and development, improved methods for measuring production in public administration, and improved coverage of the non-observed economy.

Even Iran’s economy grew 5% in 2023, driven mainly by oil exports and supported by gains in services and manufacturing. Iran’s GNI jumped 39.5% in nominal terms which, combined with the depreciation of the Iranian Rial, resulted in a 17.6% increase of the Atlas GNI per capita.

Mongolia continued its recovery after the pandemic, with real GDP increasing 7% in 2023. Growth was driven by expansions in mining of 23.4%, along with higher export prices which boosted exports by 53.4%, World Bank said.

Ukraine’s upward change in classification resulted from a resumption of economic growth in 2023 (real GDP grew 5.3%, following a drop of 28.8% in 2022) along with a continued decline in population, which has fallen more than 15% since the invasion from Russia began.

These factors were further amplified by price increases of domestically produced goods and services to result in a large increase in nominal Atlas GNI per capita of 18.5%. While Ukraine’s economy was significantly impaired by Russia’s invasion, real growth in 2023 was driven by construction activity (24.6%), reflecting a sizable increase in investment spending (52.9%) supporting Ukraine’s reconstruction effort in the wake of ongoing destruction.

West Bank and Gaza was the only country whose classification moved downward this year. The conflict in the Middle East began in October 2023, and while the impact on West Bank and Gaza was limited to the fourth quarter, its scale was nonetheless sufficient to lead to a 9.2% drop in nominal GDP (-5.5% in real terms).

Since West Bank and Gaza’s economy was close to the threshold (it entered the upper-middle-income category only last year), these declines brought Atlas GNI per capita back down to the lower-middle-income category, World Bank added.