Climate Change Impact and Structural Reforms in Kiribati
KIRIBATI
Figure 2. Kiribati: Growth and Poverty Reduction Under Alternative Development Scenarios
Real GDP growth is boosted in baseline + and
especially in pro-growth development scenario.....
1.
Real GDP Growth (%)
Baseline
and per capita GDP expands by between 20% in
baseline and 100% in the development scenario
2. Real GDP per Capita (US $)
Baseline
Comprehensive
5
4
3
Comprehensive
2
1
4,000
0
2022
3,000
2026
2030
2034
2038
2,000
2042
2046
2050
1,000
Poverty can fall substantially...
3. Poverty Headcount Rate (%)
2022
30
Baseline
20
10
0
2022
2026
2030
2034
2038
2042
2046
2050
Comprehensive
1.40
1.35
1.30
1.25
2026
2030
2034
2038
2042
2046
2050
as private sector investment helps boost growth
4. Private Investment Incremental Capital to
Output Ratio (%)
Baseline
-Comprehensive
1.20
2022
2026
2030
2034
2038
2042
2046
2050
Source: IMF Staff Computations.
Notes: Computations based on World Bank's long-term model using parameters specified in Table 1. In panel 4, the private
marginal incremental capital to output ratio measures how many extra percentage points of GDP of private investment Kiribati
needs in order to increase growth by a percentage point.
9. These findings are in line with past IMF studies that analyze the benefits of structural
reforms. IMF (2019) shows that structural reforms in various areas (product and labor market,
governance, and trade and financial sector liberalization) can deliver significant output gains over
the medium term for low-income and emerging market economies. It also notes differences
between model-based analysis and empirical studies, with the former predicting larger output gains,
but with notable differences across areas of reform (bigger differences for the financial sector, labor
and product market reform, while equal effect for governance reforms). The study builds on an
earlier study (IMF, 2015) which finds a broadly positive relationship between structural reforms and
productivity and showed that benefits of reform tend to become more pronounced when reforms
are bundled together, as done in our analysis.
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