Sustainable economic growth

In this chapter, we focus on Target 8.1, stipulating that countries should pursue real Gross Domestic Product (GDP) per capita growth rates that are in accordance with their national circumstances, and that total GDP should grow by more than 7 percent per year in the least developed countries. We start by briefly discussing the background of this target and then review some of the existing research on economic growth across the world. We show that a growth rate in total GDP of 7 percent per year has only been observed in about 10 percent of all available country-year observations over history. Growth rates exceeding 7 percent were relatively frequent among poor countries during 2000–2009 but not during 2009–2019. Since 2000, the relatively high average growth rates among poor countries have implied that their income levels have steadily converged towards those of richer countries, although at a slow pace. We also show that about one-third of all countries managed to have positive economic growth during 2010–19 while decreasing their emissions of CO₂ from production (decoupling).