The World Bank has issued a warning that both India and China are at risk of falling into the ‘middle income trap.’ This economic phenomenon occurs when countries experience stagnant growth after reaching middle-income status, preventing them from advancing to high-income levels.
The World Bank highlighted that despite rapid economic growth in recent years, structural reforms and strategic investments are necessary for India and China to avoid this trap. The organization emphasized the need for both nations to focus on innovation, skill development, and infrastructure improvements to sustain their economic momentum.
By addressing these critical areas, India and China can increase their chances of transitioning smoothly from middle-income to high-income economies, ensuring long-term prosperity and development.
