Growth in emerging markets and developing countries is set to increase this year after a financial crisis slowed trade in vulnerable regions. This turn of events could have a drastic impact on an already steadily declining rate of global poverty.

According to a report from World Bank, global trade growth has made a significant increase from 2.5 percent in 2016 to four percent this year. The financial crisis was due in part to growing concern of mounting debt and deficits in emerging markets and developing countries. World Bank Development Economic Prospects Director Ayhan Kose stated that this was a promising turn of events.

“After a prolonged slowdown, the recent acceleration in activity in some of the largest emerging markets is a welcome development for the growth in their regions and for the global economy,” Kose said.

Estimates show that the growth in emerging markets and developing countries alone will rise from 3.5 percent in 2016 to 4.1 percent this year. Growth is slated to exceed 2018 projections in the largest emerging markets and will have a positive impact on both local and global economies.

These recent predictions are in line with projected growth of income for individuals living in emerging markets and developing countries.

Additional information provided by World Bank, reflected that the number of people living below the poverty line (U.S. $1.90 a day) declined from 12.8 percent of the global population in 2012 to 9.6 percent in 2015.

World Bank Group President, Jim Yong Kim, sees the projections of economic development as a way to strengthen the growth of individuals in these regions.

“For too long, we’ve seen slow growth hold back progress in the fight against poverty, so it is encouraging to see signs that the global economy is gaining a firmer footing,” Kim said.

Kim also encourages that “with a fragile but real recovery now underway, countries should seize the moment to undertake institutional and market reforms that can attract private investment to help sustain growth long-term. Countries must also invest in people and build resilience against overlapping challenges, including climate change, conflict, forced displacement, famine, and disease.”

Though there has been real change in economic growth in emerging markets and developing countries, there is still much work to be done. In order to maintain progress, these countries must make sound investments and maintain productivity in order to reduce poverty.

 

Drew Hazzard

Photo: Flickr