Shared Prosperity

On shared prosperity — defined as the growth in income of the bottom 40 percent in each country — the picture looks mixed. In 70 of the 91 countries for which data were available, incomes of the bottom 40 percent improved between 2010 and 2015. In addition, in 54 percent of those 91 countries, their income grew faster than the average. Progress in East and South Asia has been more impressive with the bottom 40 percent growing annually by 4.7 percent and 2.6 percent respectively from 2010 to 2015. Latin America and the Caribbean saw less growth in shared prosperity than in the recent past, but at 3.2 percent per year the bottom 40 experienced sizeable income growth. Strong income growth among the bottom 40 is also observed among various Baltic countries, as they recover from the crisis in the late 2000s.

However, slow economic progress is hindering shared prosperity in some regions, particularly in some Europe and Central Asia which experienced negative or low levels of shared prosperity. More worrying, among poorer economies monitored in which extreme poverty rates remain high (particularly those in Sub-Saharan Africa), income growth at the bottom has on average been lower than in the rest of the world. In two-thirds of the 14 extremely poor countries, average incomes are increasing at an annual rate below the global average of 2 percent. Another worry is that data needed to assess shared prosperity is weakest in the very countries that most need it to improve. Only one in four low-income countries and four of the 35 recognized fragile and conflict-affected states have data that allows us to monitor shared prosperity over time. Since a lack of reliable data is associated with slow income growth for the poorest, the situation could be even worse than currently observed.

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