BAKU, Azerbaijan, October 26. Improvements in Azerbaijan’s non-energy sector can boost overall GDP growth by about 0.9 percentage points annually until 2050, Trend reports via the "Azerbaijan. Country Economic Memorandum" publication from the World Bank (WB).
According to the Bank, the improvements is such fields as innovation, market efficiency, infrastructure, and institutions in the non-oil sector of Azerbaijan will significantly contribute to Azerbaijan's economic growth.
"The simulated reform scenario assumes the Government of Azerbaijan implements far-reaching reforms by 2030, which would lead to a ‘boom’ in non-energy productivity growth, reaching the [Europe and Central Asia] ECA’s 90th percentile of [Total Factor Productivity] TFP growth in 2000-2019 of 3 percent," the report said.
As the WB expects, after the boost, non-energy TFP growth would approach 1 percent - the ECA average in 2000-2019.
"A one-percentage point increase in TFP growth boosts non-energy GDP by exactly one percentage point. The effect on overall growth is smaller but increases over time, as the non-energy sector expands," the report noted.
Moreover, as the WB believes, Higher non-energy productivity causes some indirect effects, such as increased and improved investment, providing further impetus to the economy.
"As a result, the reform would boost overall GDP growth by 1.1 percentage points in the 2030s (during the TFP boom), declining to 0.8 in the 2040s. At the same time the boost is higher in the non-energy GDP growth, which would reach 4.8 percent in 2030," the report added.
---
Follow the author on Twitter: @mariiiakhm