Research Briefing | Nov 10, 2023

EM Asia leads the pack with highest convergence potential

We have updated work we first published in February 2020, which looks at the selected EM economies’ ability to escape the “middle-income trap” and eventually achieve high-income status. Based on the middle-income trap literature, we developed a long-term growth indicator that used 33 metrics to assess risks to EM economies’ long-term growth potential.

What you will learn:

  • China, the Philippines, the Czech Republic, and Malaysia are well positioned to grow, according to our 33-factor long-term growth indicator for 20 emerging market (EM) economies. By contrast, Argentina, South Africa, Turkey, and Brazil have the weakest long-term outlook.
  • EM Asia is the region with the most favourable long-term growth score, replacing EM Europe which was in the lead the last time we conducted this exercise just prior to the pandemic. With all Latin America countries in our sample now in the “potential laggards” camp, the region continues to face relatively weak prospects for long-term growth.
  • Our methodology captures underlying structural strengths and deficiencies that do well in explaining past growth differences. Nine out of ten countries for whom our long-term indicator suggests further convergence potential caught up with the US in 2013-2022.
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