Brussels: The World Bank emphasized the significance of expanding productivity as a catalyst for increasing gross domestic product (GDP) and generating more and better job opportunities in European and Central Asian countries.

According to Anadolu Agency, the World Bank's statement on Monday highlighted the urgent need for countries in Europe and Central Asia (ECA) to enhance the efficiency of their economic assets and invest in the skills and capabilities of firms and individuals to accelerate growth. The report suggests that merely increasing capital and labor is not enough to spur economic growth.

The World Bank's new findings revealed that a 10% boost in productivity could potentially create nearly 2 million jobs in the region. This underscores the strong correlation between productivity improvements and employment growth across different countries and sectors. The report identified that the region's growth slowdown following the global financial crisis was largely attributed to a decline in productivity, which coincided with a deceleration in reforms. This stagnation led to market distortions, including a high prevalence of less efficient state-owned enterprises, and resources were not being optimally allocated.

Additionally, the statement pointed out that incomplete integration into global markets and weak firm capabilities further hindered productivity and limited the potential of the countries in the region. The report stressed that returns on additional capital investments without corresponding productivity gains were lower than in previous years, highlighting the importance of productivity in enhancing prosperity, employment, and wages.

The report asserted that if post-2008 productivity growth in ECA countries had matched pre-global financial crisis levels, the region's GDP could be approximately 62% higher. The World Bank called for a revitalization of reform momentum to unlock the region's productivity potential. Targeted reforms in trade, investment, digitalization, productivity, and skills were identified as critical steps in this renewed reform agenda.