Economic activity in the Europe and Central Asia (ECA) region is expected to remain resilient but slow this year as a weaker global economy, slowdown in China, and lower commodity prices weigh on the region¡¯s growth outlook. Regional growth is likely to drop to 2.8 % in 2024, following substantial strengthening to 3.3 % last year because of a shift from contraction to expansion in the Russian Federation and war-hit Ukraine, and a more robust recovery in Central Asia. Slow growth further delays the region¡¯s recovery from the effects of past shocks and renewal of economic dynamism. To achieve stronger economic growth and overcome the middle-income trap, countries need to harness the private sector potential and focus on reforms fostering competition, free markets, education, and governance.
The impacts of climate change are profoundly affecting the Europe and Central Asia region. As a result of heavy reliance on fossil fuels and energy-intensive economies, the region¡¯s per capita carbon emissions are among the highest in the world. The clean energy transition will require massive private and public investment and a range of policies to ensure that investment is effective. Tailored policies based on country conditions would help place the region on a path of sustainable and greener long-term growth. These policies should account for the costs of implementation and the tradeoffs between immediate environmental objectives and long-term social benefits.
Europe and Central Asia (ECA) continues to be negatively impacted by Russia¡¯s invasion of Ukraine, tighter global financial conditions, persistent inflation, and global economic fragmentation. Nonetheless, economic growth for the ECA emerging markets and developing economies has been revised up to 2.4 percent for 2023. The pickup in growth reflects improved projections for Ukraine, Central Asia, T¨¹rkiye, and Russia. Downside risks cloud the outlook. High inflation may persist amid heightened volatility in global commodity markets and a surge in energy prices. Global financial conditions may tighten further.
The Office of the Chief Economist provides guidance on strategic priorities and technical quality of economic analysis in the Europe and Central Asia region.
This mission is accomplished through an analytical program that challenges conventional wisdom, takes on new, topical and controversial issues, and provides cross-sectoral and region-wide analysis, and serving as principal regional spokesperson inside and outside the Bank on strategic and economic issues facing the region.
What are the economic developments and policies in Europe and Central Asia? What challenges lie ahead? Watch this event replay on how to harness the private sector's potential to accelerate growth in the region.
Economic activity in the Europe and Central Asia region is expected to remain resilient but slow for a third consecutive year in 2024, mirroring the global economy¡¯s downward growth path.
It may seem that the relentless march of artificial intelligence will destroy jobs. Yet, of much greater concern for the economies of Europe and Central Asia is the dramatic reduction of the labor force.
