Back to Questions

The IMF has pointed out that the fast growing economies of Asia face the risk of falling into ‘middle-income trap’. It means that average incomes in these countries, which till now have been growing rapidly, will stop growing beyond point-a point that is well short of incomes in the developed West. The IMF identifies a number of causes of middle-income trap-none
of which is surprising-from infrastructure to weak institutions, to less than favourable macroeconomic conditions. But the broad, overall cause, says IMF, is a collapse in the growth of productivity.

Which among the following is the most logical, rational and critical inference that can be made from the above passage?

CSAT 2017

Options

Once a country reaches middle income stage, it runs the risk of falling productivity which leads to
stagnant incomes.

Falling into middle-income trap is a general characteristic of fast growing economies.

There is no hope at all for emerging Asian economies to sustain the growth momentum.

As regards growth of productivity, the performance of Asian economies is not satisfactory.