Economic Growth & Global Prosperity: A Century of Progress

The past century has witnessed unprecedented economic growth, lifting billions out of poverty and dramatically extending lifespans. While this progress is undeniable, the question now is whether that momentum can be sustained – and, crucially, whether future growth will be inclusive and sustainable. Emerging economies, currently the primary engines of global expansion, hold the key to answering that question.

For decades, economic development has been largely measured by Gross Domestic Product (GDP) and other macroeconomic indicators. This approach has yielded results, particularly in what are now termed “growth markets,” with rising growth rates, expanding infrastructure, and greater integration into the global economy. However, a singular focus on macroeconomic gains has created significant gaps. Human development indicators have often lagged, innovation capacity hasn’t been fully realized, and private sectors in many countries remain underdeveloped. Perhaps most importantly, equitable growth – growth that benefits all citizens with sustainability and inclusion at its core – has been a rare outcome.

A new paradigm is needed, one that moves beyond simply measuring the size of economies and instead prioritizes opportunities for individuals, the resilience of systems, and fairness of outcomes. This “new calculus of prosperity,” as described by Dina Sherif of MIT’s Kuo Sharper Center and Yasar Jarrar of Gov Campus, demands a shift in focus. It requires growth driven by entrepreneurs, anchored in innovation, and built on sustainability and inclusion as non-negotiable principles.

The shift is already underway. Markets once labeled “emerging” are no longer simply catching up to advanced economies; they are forging new pathways that could define the global future. These markets represent a staggering 85% of the world’s population and are now the dominant force behind global growth and creativity. What was once considered “potential” is now demonstrable progress.

The data supports this assertion. According to the International Monetary Fund’s (IMF) April 2025 World Economic Outlook, emerging markets and developing economies are projected to grow at 3.7% this year – nearly three times the 1.4% forecast for advanced economies. World Economics paints an even more striking picture, projecting an even larger divergence in growth rates. This suggests a fundamental rebalancing of the global economic order.

However, this growth isn’t evenly distributed. The World Bank’s 2024 Poverty, Prosperity, and Planet Report reveals that nearly 700 million people – 8.5% of the global population – still live in extreme poverty, subsisting on less than $2.15 per day. Progress in reducing poverty has stalled, hampered by sluggish growth, the setbacks caused by the COVID-19 pandemic, and increased fragility in many regions. Poverty rates in low-income countries are, in fact, higher now than they were before the pandemic.

The report also highlights a broader definition of poverty. Approximately 3.5 billion people – 44% of the global population – remain poor by a standard more relevant to upper-middle-income countries ($6.85 per day). Worryingly, the number of people living on less than this amount has barely changed since the 1990s, largely due to population growth. This underscores the challenge of translating economic growth into tangible improvements in living standards for a significant portion of the world’s population.

Sub-Saharan Africa remains a particularly acute area of concern, accounting for 16% of the world’s population but a disproportionate 67% of those living in extreme poverty. Two-thirds of the world’s extremely poor reside in Sub-Saharan Africa, a figure that rises to three-quarters when including all fragile and conflict-affected countries. A significant 72% of the world’s population in extreme poverty lives in countries eligible for assistance from the International Development Association (IDA).

The IMF acknowledges the increasing complexity and unpredictability of the global economic landscape, referring to it as “epistemic uncertainty.” This uncertainty, coupled with policy unpredictability, is a major factor influencing the economic outlook. An abrupt increase in tariffs and the resulting uncertainty, the IMF warns, will significantly slow global growth. The organization’s report reflects this complexity by presenting a range of forecasts, acknowledging the inherent difficulty in predicting future economic performance.

The historical link between economic growth and improved living conditions remains strong. As Our World in Data points out, economic growth is essential for providing the goods and services that underpin health, nutrition, education, and housing. Societies that have experienced substantial economic growth have seen dramatic improvements in these areas. However, growth alone is not sufficient. It must be accompanied by policies that promote equitable distribution, sustainability, and innovation.

The McKinsey Global Institute’s research into the “progress machine” of the past century reinforces this point. Understanding the drivers of past advances is crucial for navigating the challenges and opportunities of the future. The focus must now be on ensuring that the benefits of economic growth are shared more broadly and that growth is environmentally sustainable. The future of global poverty and inequality, and indeed the future of prosperity itself, hinges on the ability of emerging economies to continue expanding – but to do so in a way that is both inclusive and sustainable.