Report provides a comprehensive roadmap to enable developing countries to escape the “Middle-Income Trap”.
- Middle-Income Trap is a situation in which a Middle-Income Country (annual GDP per capita in range of $1,136 to $13,845) experiences systematic growth slowdowns as it is unable to take on new economic structures needed to sustain high-income levels.
Key Highlights
- As countries grow wealthier, they usually hit a trap at about 10% of annual U.S. GDP per person ($8,000) and do not grow fast further.
- Since 1990, only 34 Middle-Income Countries (MICs) have managed to shift to high-income status.
- At end-2023, 108 countries were classified as MICs with home to 75% of global population and generating >40% of global GDP.
- Challenges they face in escaping middle income trap include rapidly aging populations, rising protectionism in advanced economies, and need to speed up energy transition.
- India joined club of Lower MICs in 2007 and has remained there since with its present GNI per capita at $2,540.
- At current trends, it will take India 75 years just to reach one-quarter of US income per capita.
Key recommendations
|
