JAKARTA • Indonesia is now officially an upper-middle income country, an upgrade from its previous status as lower-middle income, according to the World Bank's latest country classifications by income level.
The classifications are based on gross national income (GNI) per capita.
Indonesia saw its GNI per capita rise to US$4,050 (S$5,648) last year, surpassing the income threshold for upper-middle income, from US$3,840 in 2018.
The World Bank uses the indicator to decide whether a country may use the bank's facilities, such as loan pricing.
Upper-middle income status categorises countries with a GNI per capita of US$4,046 to US$12,535, while lower-middle income status categorises countries with a GNI per capita of US$1,036 to US$4,045.
Countries with a GNI per capita of below US$1,036 are considered low income and those with a GNI per capita of US$12,535 are considered high income.
"Indonesia's improved status is proof of economic resiliency and maintained economic growth over the last few years," Indonesia's Finance Ministry said in a statement on Thursday.
"This will strengthen the trust of investors and trading partners in Indonesia's economy."
Indonesia has made progress in poverty reduction over the past 15 years, with the poverty rate dropping below 10 per cent.
Meanwhile, those in the middle-class group have grown from 7 per cent to 20 per cent of the population, with 52 million Indonesians currently belonging to that group, according to World Bank's Aspiring Indonesia-Expanding the Middle Class report.
"The government will continue to push for structural reforms to boost competitiveness, improve industry capabilities and reduce the current account deficit to empower the economy," said the Finance Ministry.
The coronavirus pandemic has upended the country's economy this year, with the government expecting full-year growth to reach only 1 per cent under a baseline scenario or for the economy to contract 0.4 per cent under a worst-case scenario.
The World Bank projects zero per cent growth for South-east Asia's biggest economy this year.
THE JAKARTA POST/ASIA NEWS NETWORK