LICs moving to middle-income status slows – WB

In 2000, 63 emerging market and developing economies (EMDEs) were classified as low-income countries (LICs) and whey were home to more than 60% of the 1.8 billion people worldwide then living in extreme poverty said World Bank in a report.

‘Since then, 39 of those countries have graduated to middle-income status. Yet amid deteriorating global and domestic conditions, the rate at which LICs are climbing the income ladder has slowed markedly.’

Twenty-four countries that were LICs at the turn of the century remain so, with annual per capita incomes below $1,145 in 2023. South Sudan and the Syrian Arab Republic have joined their ranks amid debilitating conflicts, raising the total to 26 LICs today.

Across a wide spectrum of development indicators, today’s LICs are worse off than LICs in 2000 that subsequently attained middle-income status. In 2024, these 26 countries—concentrated in Sub-Saharan Africa—comprised more than 40 percent of people living in extreme poverty globally.

On recent trends, all but six of today’s LICs will remain low-income through 2050. The economic challenges confronting LICs have intensified in the last 15 years amid deadlier conflict and violence, climate shocks, debt crises, and anemic growth. In today’s LICs as a whole, annual per capita growth has averaged less than 0.1% since 2010—signifying 15 lost years.

Traditional modes of structural transformation have also stalled, with labor productivity estimated to have declined outright. As a consequence of these trends, extreme poverty has ceased falling in LICs.

Moreover, at average 2010-2019 growth rates, only six LICs would be expected to graduate to middle-income by 2050. This would represent less than one-quarter of eligible countries, down sharply from the nearly two-thirds that advanced in the first quarter of this century.

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