MSCI Inc. (NYSE: MSCI) has expelled Greece from its index of developed countries, adding to the economic woes of the debt-ridden country, and demoted it to the Emerging Markets index, as part of its semi-annual index review, an MSCI release said on Tuesday.

“The minimum standards that currently prevail in Developed Markets reflect continuous market improvements introduced by authorities in other countries over the years. However, very few of these improved market practices have been reflected in the Greek market,” the statement said.

MSCI covers 79 markets and classifies them based on size and liquidity, market accessibility, ease of capital flows and stability of institutional framework. It labels markets with huge stock markets and with fewer restrictions on foreign fund flow as developed markets. An estimated $7 trillion of investments follow MSCI's indexes.

Further, the statement added that the MSCI Greece Index has not qualified for the developed market index criterion for size for the last two years, and pointed to investors' concerns about the restrictive nature of the "in‐kind transfer" and "off‐exchange transaction‐like facilities" that were introduced in 2008 by the Greek authorities.

It’s the first time that MSCI has moved a country from its developed markets group to the emerging markets category, since the launch of its emerging-markets index in 1987, Wall Street Journal reported.

Greece is still struggling with its debt payments and investors are keeping away even as the country struggles under austerity measures enforced after multiple attempts to rescue its economy and keep it within the euro zone.

On Monday, Greece's attempt to privatize its DEPA gas company failed because it did not get any bidders.

MSCI's statement also announced its decision to reclassify the Qatar and UAE indices from Frontier Markets to Emerging Markets, and demote the Morocco index from Emerging Markets to Frontier Markets.

MSCI said that it is reviewing China's A-shares for a possible inclusion in the Emerging Markets index following a series of liberalization measures in the past 12 months and the significant size of the country's A‐share market.

However, it noted that “key obstacles in the areas of capital mobility, quota allocation and taxation continue to exist and substantial progress would need to be made in order to warrant an inclusion in the MSCI Emerging Markets Index.”