How does the WEO categorize advanced versus emerging and developing economies?
A. The main criteria used by the WEO to classify the world into advanced and emerging economies are (1) per capita income level, (2) export diversification—so oil exporters that have high per capita GDP would not make the advanced classification because around 70% of its exports are oil, and (3) degree of integration into the global financial system. In the first criteria, we look at an average over a number of years given that volatility (due to say oil production) can have a marked year-to-year effect. Note, however, that these are not the only factors considered in deciding the classification of countries. As it says in the WEO Statistical Appendix, “Rather than being based on strict criteria, economic or otherwise, this classification has evolved over time with the objective of facilitating analysis by providing a reasonably meaningful organization of data.” Reclassification only happens when something marked changes or the case for change becomes overwhelming. For example, Malta j
