- Over the longer term, the resilience of developing countries’ improved fundamentals will be tested.More prudent macroeconomic management and technological progress (see chapters 2 and 3) have contributed to an increase in total factor productivity (TFP) and real income growth over the past 15 years.
- Over the next 10 years, these same factors are expected to enable developing countries to achieve annual per capita income gains of 3.9 percent, and perhaps as much as 3.4 percent in the following decade.These projections imply per capita income growth that is more than twice as fast as that in high-income countries.
- Growth of such magnitude would reduce the number of people living on less than a dollar a day from 1.2 billion in 1990 and 970 million in 2004 to 624 million by 2015. Such aggregate outcomes are not guaranteed, however, and performance across individual countries is likely to be diverse.
- Inflation has remained remarkably muted worldwide despite four years of strong growth.Many developing countries have contained domestic inflation following a tightening of monetary and fiscal policies.
Tech Progress Helps Developing Countries Reduce Poverty
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