Indeed, the deceleration of TFP growth in recent years and the relevance of this factor in explaining the lower rates of economic activity in EMEs, clearly point to the need for action on the supply side.
The crucial role of structural reform is underlined when taking into consideration that many EMEs face the risk of falling into a “middle-income trap”.8 At lower levels of development, the availability of a substantial amount of underutilized resources and easy productivity gains (stemming for instance from importing foreign technologies or mobilizing  7  See International Monetary Fund (2016): World Economic Outlook, April.