WB recommends Azerbaijan to focus on service exports for sustainable economic growth

Azerbaijan should focus on developing and exporting services, as well as implementing institutional reforms to achieve stable economic growth beyond the oil sector, World Bank Senior Economist for Azerbaijan Steve Loris Gui-Diby stated during "Fitch on Azerbaijan 2026" in Baku, Report informs.

"At present, total factor productivity indicators in the non-oil sector do not fully compensate for the natural decline in production in the oil and gas industry. Nevertheless, the low baseline provides Azerbaijan with a chance to rapidly change this dynamics, provided targeted reforms are implemented," the WB representative stated.

According to WB estimates, the services sector, which does not depend on logistical constraints and the lack of direct access to the open sea, can become the main engine of non-oil economic growth in the medium and long term.

"To attract investors to the services sector and turn the country into a regional hub, it is necessary to ease barriers to attracting capital, liberalize labor movement, and ensure unimpeded access to cross-border services," Gui-Diby emphasized.

The economist considers the intensification of Azerbaijan's accession process to the World Trade Organization (WTO) to be another significant signal for the international investment community, which will make it possible to create a transparent and unified regulatory environment for foreign investors.

Regarding the development of traditional manufacturing, in the specialist's opinion, it is associated with tough competition from larger regional players; therefore, concentrating on the service economy and strengthening domestic competitiveness represents the most promising path.