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// Workers AI · dad joke modeWhat did the developed market say? "I've matured.

From Wikipedia, the free encyclopedia
World map showing FTSE's April 2026 Classification of Equity Markets.[1]
  Developed Markets
  Advanced Emerging Markets[a]

In finance and economics, a developed market (also advanced economy) is a country or jurisdiction that possesses a highly advanced economy, sophisticated financial market infrastructure, and mature capital markets. The term is primarily used by international financial institutions, index providers, and investment professionals to categorize national economies for the purposes of investing, economic analysis, and policy formulation. It is contrasted with emerging markets and frontier markets, which are at earlier stages of economic and financial development.

Definition and criteria

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No single, universally accepted definition of a developed market exists, as international organizations, rating agencies, and financial institutions apply varying baseline criteria.[2] Despite these differences, classifications consistently rely on a core set of macroeconomic benchmarks.[3][2] Chief among these are high gross domestic product (GDP) and gross national income (GNI) per capita, which typically reflect advanced levels of industrialization and a predominant shift toward a service economy.[4] These economic indicators generally correlate with high standards of living, extensive public infrastructure, and elevated life expectancy.[3]

Financial market maturity serves as a critical secondary determinant for classification.[5][6] Developed markets are characterized by highly liquid, deep, and well-established financial systems, including robust stock, bond, and foreign exchange markets.[2][3] To sustain this liquidity, these economies maintain high levels of openness to foreign investment, efficient regulatory oversight, and legal frameworks that permit the relatively unrestricted movement of international capital.[4][6]

The operational stability of these markets is underpinned by strong institutional governance and political stability.[3][7] Developed market frameworks require robust legal systems that predictably enforce contracts, protect investor interests, and uphold private property rights.[3][6] The presence of transparent regulatory bodies and consistent public institutions reduces sovereign risk and systemic risk, fostering the predictable economic environment necessary for large-scale commerce.[3]

Classification

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Several major international organizations and index providers classify countries or territories into developed or comparable categories, using their own methodologies.

MSCI

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World map showing the MSCI 2025 market classification for Developed Markets and Emerging Markets.

MSCI, a leading global index provider, evaluates equity markets annually to determine whether they should be classified as developed, emerging, frontier, or standalone.[5] The MSCI Market Classification Framework uses three main criteria, which include economic development, which considers the sustainability of economic development and is primarily used to determine developed-market status; size and liquidity requirements[5][4], which determine which securities meet the minimum investability requirements for the MSCI Global Standard Indexes;[5][4] and market accessibility, which reflects the experiences of international institutional investors in accessing and transacting in a given equity market, based on five criteria.[8]

The MSCI World Index tracks large and mid-cap stocks across nations that successfully meet these developed-market standards. As of December 2025, the index encompassed 23 markets: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, United Kingdom, and the United States.[9] Following subsequent reviews, MSCI announced that Greece would be reclassified from emerging to developed market status, with the transition scheduled to take effect in May 2027.[10]

FTSE Russell

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World map showing the FTSE Russell 2025 equity country classification for Developed Markets and Emerging Markets.

FTSE Russell, another major index provider, uses a four-tiered equity country classification system: Developed, Advanced Emerging, Secondary Emerging, and Frontier.[11][12] The classification process focuses on a country's political and market environment and is largely independent of gross national income (GNI) or economy size.[13] FTSE Russell's criteria for developed market status include high income (as measured by the World Bank GNI per capita rating), a well-developed regulatory compliance, fair treatment of minority shareholders, openness to foreign ownership, ease of capital repatriation, and efficient custody and settlement systems.[13]

FTSE Russell classifies 25 markets as Developed.[1] In September 2026, it is scheduled to reclassify Greece from Advanced Emerging to Developed market status.[1]

International Monetary Fund

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World map of advanced economies based on the IMF World Economic Outlook for October 2025.[14]

The International Monetary Fund (IMF) uses the term "advanced economies" to describe the most developed countries in its World Economic Outlook.[15] As of April 2026, the IMF classified 43 economies as advanced.[15][16] The classification is not based solely on income but also considers financial market maturity, technological capability, and other structural factors.[17] The list includes major economies such as the United States, Japan, and Germany, as well as smaller, highly specialised economies like Singapore, Ireland, and New Zealand.[16]

World Bank

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Map of world economies based on the World Bank income classification for the 2027 fiscal year

The World Bank Group classifies countries into four income groups, such as low, lower-middle, upper-middle, and high-income, based on gross national income (GNI) per capita calculated using the Atlas method.[18][19] For the 2027 fiscal year, the high-income threshold was set at a GNI per capita of $14,375 or more.[18] As of 2026, the World Bank classified 87 countries and territories as high-income economies.[18] The World Bank also includes an Organisation for Economic Co-operation and Development (OECD) subcategory within its high-income group.[20]

Other index providers

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Other index providers, such as S&P Dow Jones Indices and STOXX, also maintain their own classifications of developed markets.[21][22] These classifications may differ slightly from those of MSCI and FTSE Russell.[21] For instance, FTSE Russell and S&P Dow Jones Indices classify South Korea as a developed market, whereas MSCI has historically classified it as an emerging market, although this has been subject to review.[23]

Table

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Country / Region MSCI

Developed Markets

 FTSE Russell

Developed Markets

 S&P Dow Jones Indices

Developed Markets

 IMF

Advanced Economy

AndorraNoNoNoYes
AustraliaYesYesYesYes
AustriaYesYesYesYes
BelgiumYesYesYesYes
BulgariaNoNoNoYes
CanadaYesYesYesYes
CroatiaNoNoNoYes
CyprusNoNoNoYes
Czech RepublicNoNoNoYes
DenmarkYesYesYesYes
EstoniaNoNoNoYes
FinlandYesYesYesYes
FranceYesYesYesYes
GermanyYesYesYesYes
GreeceNo[b]No[c]YesYes
Hong KongYesYesYesYes
IcelandNoNoNoYes
IrelandYesYesYesYes
IsraelYesYesYesYes
ItalyYesYesYesYes
JapanYesYesYesYes
South KoreaNoYesYesYes
LatviaNoNoNoYes
LiechtensteinNoNoNoYes
LithuaniaNoNoNoYes
LuxembourgNoYesYesYes
MacauNoNoNoYes
MaltaNoNoNoYes
NetherlandsYesYesYesYes
New ZealandYesYesYesYes
NorwayYesYesYesYes
PolandNoYesNoNo
PortugalYesYesYesYes
Puerto RicoNoNoNoYes
San MarinoNoNoNoYes
SingaporeYesYesYesYes
SlovakiaNoNoNoYes
SloveniaNoNoNoYes
SpainYesYesYesYes
SwedenYesYesYesYes
 SwitzerlandYesYesYesYes
TaiwanNoNoNoYes
United KingdomYesYesYesYes
United StatesYesYesYesYes

Notes

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  1. ↑ FTSE Advanced Emerging is a market that has some characteristics of a developed market, but does not fully meet its standards.
  2. ↑ Will be reclassified as a developed market in May 2027.[24]
  3. ↑ Will be reclassified as a developed market on 21 September 2026.[25]

See also

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References

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  1. 1 2 3 "FTSE Classification of Equity Markets – FTSE Equity Country Classification March 2026 Interim Announcement" (PDF). www.lseg.com. Retrieved 7 July 2026.
  2. 1 2 3 "What is the difference between a developed, emerging, and frontier market?". nasdaq.com. Retrieved 2 July 2026.
  3. 1 2 3 4 5 6 "Investment fundamentals: Developed markets | SEI U.S." www.seic.com. Retrieved 2 July 2026.
  4. 1 2 3 4 "MSCI Market Classification Framework" (PDF). msci.com. Retrieved 2 July 2026.
  5. 1 2 3 4 "Market Classification". www.msci.com. Retrieved 2 July 2026.
  6. 1 2 3 "Indexing the world" (PDF). lseg.com. Retrieved 2 July 2026.
  7. ↑ "MSCI FIXED INCOME MARKET CLASSIFICATION FRAMEWORK". msci.com. Retrieved 2 July 2026.
  8. ↑ "MSCI Announces the Results of the MSCI 2026 Global Market Accessibility Review" (PDF). msci.com. Retrieved 7 July 2026.
  9. ↑ "MSCI World Index (USD)". msci.com. Retrieved 7 July 2026.
  10. ↑ "MSCI to Reclassify the MSCI Greece Indexes from Emerging Market to Developed Market status | MSCI". www.msci.com. Retrieved 7 July 2026.
  11. ↑ "Expand your view: know your world index". www.lseg.com. 1 April 2026. Retrieved 7 July 2026.
  12. ↑ "FTSE Equity Markets Watch List and Transitional Indices" (PDF). www.lseg.com. Retrieved 7 July 2026.
  13. 1 2 "FTSE Equity Country Classification Process" (PDF). www.lseg.com. Retrieved 7 July 2026.
  14. ↑ "Groups and Aggregates". data.imf.org. Retrieved 4 March 2026.
  15. 1 2 "World Economic Outlook Database - Groups and Aggregates Information". IMF. Retrieved 7 July 2026.
  16. 1 2 "FISCAL MONITOR" (PDF). imf.org. Retrieved 7 July 2026.
  17. ↑ "STATISTICAL APPENDIX" (PDF). imf.org. Retrieved 7 July 2026.
  18. 1 2 3 "World Bank Country and Lending Groups – World Bank Data Help Desk". datahelpdesk.worldbank.org. Retrieved 7 July 2026.
  19. ↑ "Understanding country income: World Bank Group income classifications for FY26". World Bank Blogs. Retrieved 7 July 2026.
  20. ↑ "Data for High income, OECD members". World Bank Open Data. Retrieved 7 July 2026.
  21. 1 2 "Market Classification | S&P Dow Jones Indices". www.spglobal.com. Retrieved 7 July 2026.
  22. ↑ "Results of annual Emerging and Developed Markets classification review for STOXX indices". STOXX. 22 April 2022. Retrieved 7 July 2026.
  23. ↑ Hyung-seok, Choi (24 June 2026). "South Korea Misses MSCI Developed Index Again". The Chosun Daily. Retrieved 7 July 2026.
  24. ↑ Campos, Rodrigo. "Greece set to rejoin MSCI developed markets index in 2027". Reuters. Retrieved 6 June 2026.
  25. ↑ Kokkinidis, Tasos (8 October 2025). "Athens Stock Exchange Earns "Developed Market" Status From FTSE Russell". GreekReporter.com. Retrieved 6 June 2026.
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