'MIDDLE-INCOME TRAP HALTS INDIA'S PROGRESS'

More than 100 developing countries, including China, India, Brazil, and South Africa, face serious obstacles that could hinder their efforts to become high-income countries in the next few decades, according to a new World Bank study that provides the first comprehensive roadmap to enable developing countries to escape the “middle-income trap.”

Drawing on lessons of the past 50 years, the World Development Report 2024 finds that as countries grow wealthier, they usually hit a “trap” at about 10 per cent of annual US GDP per person--the equivalent of USD 8,000 today.

That’s in the middle of the range of what the World Bank classifies as “middle-income” countries.

Since 1990, only 34 middle-income economies have managed to shift to high-income status--and more than a third of them were either beneficiaries of integration into the European Union, or of previously undiscovered oil.

At the end of 2023, 108 countries were classified as middle-income, each with annual GDP per capita in the range of USD 1,136 to USD 13,845.