Botswana faces �middle income trap�

Real Per Capita GDP Relative to Middle Income Trap line
Real Per Capita GDP Relative to Middle Income Trap line

Botswana and several other African middle-income countries need to implement momentous reforms to avoid a ‘middle income trap’ as economic growth rates gradually drop while per capita income has stagnated, the IMF has observed.

From high growth rates averaging over eight percent in the past decades that were responsible for the country’s quick rise from a least developed country to an upper middle-income economy, economic growth measured by real GDP has stabilised at around four percent in recent years.

According to the IMF researchers Lamin Leigh and Marshall Mills, many middle income countries (MICs) including Botswana, have experienced a slowdown in trend growth in the last decade with recent research showing that most of the growth moderation can be explained largely by slowdowns in productivity growth.

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