Avia Collinder, Business Reporter
In its publication on remittances released last month, the World Bank said Antigua & Barbuda has regained its status as a high income economy, leaving the majority of regional developing states behind.
The reversal comes after the island of 89,070 residents finalised an International Monetary Fund programme.
Alessandro Legrottaglie, the World Bank's senior country officer for Antigua, who also has responsibility for the OECS, said Wednesday that Antigua moved into the 'high income' category on July 1, 2013.
Notably, however, this is a renewal of its status, as the Caribbean nation was already classified once as high income in 2010, before falling back to the 'upper middle income' category.
Antigua & Barbuda joined other new entrants Chile, Latvia, Lithuania, Russia, and Uruguay to the group of countries with gross national income per capita of US$12,616 or more, and are now classified as high income.
Legrottaglie explains that for operational and analytical purposes, the World Bank's main criterion for classifying economies is GNI per capita.
Based on its GNI per capita, every economy is classified as low income, middle income (subdivided into lower middle and upper middle), or high income.
"Each year on July 1, the World Bank revises the classification of the world's economies based on estimates of gross national income per capita for the previous year," said Legrottaglie.
The classifications, effective July 1, are as follows:
Low income: US$1,035 or less
Lower middle income: US$1,036 to $4,085
Upper middle income: US$4,086 to $12,615
High income: US$12,616 or more
"Low and middle-income economies are sometimes referred to as developing economies. The term is used for convenience; it is not intended to imply that all economies in the group are experiencing similar development, or that other economies have reached a preferred or final stage of development," Legrottaglie said.
Antigua's GDP was recorded at US$$1.176 billion in 2012; primary school enrolment was recorded at 99 per cent in 2011; and its GNI per capita reached US$12,640 in 2012.
At mid-year, the IMF completed its 10th and final review under a standby arrangement for Antigua.
The Fund declared in June that Antigua's fiscal deficit dropped from 18 per cent of GDP in 2009 to just over one per cent in 2012; its debt ratio fell from 102.5 per cent of GDP to 89 per cent in the same period.
The IMF said Antigua's economic recovery was gaining speed, with improvements in the tourism and construction sectors. But it also warned of significant challenges, saying that much of the adjustment under the rescue programme came from cuts in public spending and investment, while tax revenue targets for 2013 have been met largely through one-off payments of back taxes.
Another risk looms in the expiration of debt relief and upcoming payments due to foreign creditors, the IMF said.