The World Development Report 2024 — authored by the World Bank — calls attention to the phenomenon of the “middle-income” trap, or the slowing down of growth rates as incomes increase. Over the last 34 years, only 34 middle-income economies — defined as economies with per capita incomes between $1,136 and $13,845 — have transitioned to higher income levels. In the modern economy, there are plenty of headwinds that India must overcome to successfully navigate the middle-income trap. Another economy that broke the middle-income trap was Chile. An economy cannot break a middle-income trap if workers are unable to partake in the growth process, as reduced consumption demand will become a drag on the economy.

Source: The Hindu October 10, 2024 19:04 UTC