Key Points
Today, the middle-income trap continues to burden over 100 countries around the world, according to the World Banks 2024 World Development Report..
The World Banks report describes the middle-income trap as a situation where middle-income countries face serious headwinds related to economic growth, wage competition and innovation, and often rely on policies predicated on superficial measures of economic efficiency..
In a separate report, the International Monetary Fund notes that countries that have been stuck in the middle-income trap in recent decades have found themselves caught between the rapidly changing advanced technology of rich countries, and competition in mature products from poor countries with low wages...
The World Bank maintains that growth prospects for middle-income countries depend on their ability to increase production through innovation a difficult feat for many economies to achieve at scale..
Most middle-income countries remain wedded to an approach out of the last century: policies focused heavily on attracting investment, Indermit Gill, the World Banks Chief Economist and a member of the World Economic Forums Chief Economists community, told the Forum..
