As Samoa’s economy continues its precipitous decline led by the global pandemic it has now dropped to the category of a "lower middle income" country according to data released by the World Bank. 

Samoa's economy, which relied up to 25 per cent on tourism has been suffering since border closures associated with  COVID-19. The economy had been steadily growing but fell last year and is projected to fall by more than 10 per cent, according to Asian Development Bank estimates.

World Bank classifications have reflected that decline. The Bank, which previously defined Samoa as an upper-middle income country now defines it as a lower middle income country for the financial year.

Samoa is one of just four countries to make the shift from the upper-middle income to lower-middle status.

It joins Belize, Indonesia and Iran in its backslide. 

Elsewhere, Romania, Panama and Mauritius have dropped from “high income” to “upper-middle income.” 

The decreases are related to COVID-19 and the decimation of local tourism and hospitality businesses 

Research from the ANZ Bank says that 4,500 people lost their jobs in 2020.

The World Bank assigns the world’s economies to four income groups—low, lower-middle, upper-middle, and high-income countries. 

The classifications are updated each year on 1 July and are based on a country's Gross National Income (G.N.I.) per capita. Measured in U.S. dollars, the G.N.I. is the total amount of money earned by a nation and its people and is a widely used metric to measure and track nations' wealth from year to year.

Samoa, like Indonesia, Mauritius and Romania were very close to the lesser classifications in 2019 and the global pandemic-led COVID-19 downturn severely affected the countries' economies; 

The G.N.I. per capita for Samoa as of 1 July, 2019 was USD$4,180. 

As of 1 July, 2020, it had decreased $110 to $4,070.

The upper-middle income classification rose to those with G.N.I per capita measurements of USD$4,096-USD$12,695 in line with inflation.

Ten economies have moved to a different category this year, according to the data compiled by the Bank; some have confounded expectations and moved to a higher category despite the global depression.  

“While the World Bank’s income classification reflects the impact of COVID-19 in 2020, three countries are moving to a higher category,” the Bank states, 

In Belize, tourism was severely affected by the COVID-19 pandemic causing its G.N.I. to drop significantly.

Better analysis of exchange rates explains Iran's classifications, the Bank said. 

Meanwhile Panama was highly impacted by the COVID-19 pandemic, which restricted several activities (construction, retail, and tourism-related industries) leading to a sharp decline in the nation's total economic output.

The countries moving up the ladder are Haiti (low income to lower-middle income), Moldova (lower-middle income to upper-middle income) and Tajikistan (low income to lower-middle income).

Haiti has published an improved series of national accounts statistics in July 2020, with revised Gross Domestic Product (total value of the economy's output) substantially higher than previously published.  

Moldova's change in classification is due to the incorporation of improved population data reflecting the most recent census. 

In Tajikistan, although the COVID-19 pandemic negatively impacted household consumption and investment, a large increase in exports of gold led to their increase in performance. 

The classifications were driven by two broad reasons, the Bank says.

In each country, factors such as economic growth, inflation, exchange rates, and population growth influence G.N.I. per capita. 

Revisions to the method used to calculate national accounts and accounting data can also have influence some measurements. 

The income classifications are listed in "real terms", which means they are tied to the changing value of money.

Thresholds moved up this year in line with inflation. 

In 2020, the threshold for lower-middle income was $1,035 to $4,045.

For 2021, lower-middle income is between $1,046 to $4,095.

Venezuela, previously classified as an "upper-middle income" country, is now "unclassified" due to a lack of available data in the recent period.

The Samoa Observer made attempts to reach the Central Bank of Samoa, local economist Afualo Dr. Wood Salele and the World Bank’s Lead Economist and Programme Manager Nada Hamadeh, for comment on Friday.

No response was received as of press time Friday evening.