World Bank warns of ‘uncertain’ economic outlook for Europe and Central Asia
The World Bank says Europe and Central Asia continue to struggle to contain the coronavirus pandemic, which is clouding the region’s economic outlook.
The Washington-based lending arm of the International Monetary Fund (IMF) said in its latest global economic outlook report, published on June 8, that the economic growth of the 23 countries it brings together in the region is expected to reach 3.9% in 2021, the strengthening of external demand and high prices of industrial raw materials offsetting the negative impact of recent resurgence of new cases of COVID-19.
The World Bank warned, however, that the outlook remains “uncertain”, with uneven vaccine deployments and the withdrawal of national macroeconomic support measures weighing on the regional recovery.
“Several countries in Central Asia, Eastern Europe and the Western Balkans face bottlenecks related to the production, supply or delivery of vaccines secured through the COVAX facility or other agreements, ”the report notes.
“Growth could be weaker than expected if the pandemic takes longer than expected to subside, if external financing conditions tighten or if political uncertainty and geopolitical tensions increase further,” he said. declared.
The report says that a resurgence of COVID-19 cases in early 2021 interrupted the start of economic recovery in many countries in the region and warned that “the aftermath of the pandemic, including slowdowns in the build-up of physical and human capital, are emerging in the medium term. outlook if left untreated.
The World Bank has also noted that recent currency depreciations have put further upward pressure on prices, a growing concern for some economies still trying to shake off the effects of decades of Soviet-era planning.
“Due to inflationary pressures, key interest rates have been raised in a third of the region’s economies so far in 2021,” the bank said, pointing to Armenia, Belarus, Georgia, Kyrgyzstan, Russia, Tajikistan, Turkey and Ukraine. .
The Russian economy is expected to grow 3.2% in 2021, while the Western Balkans is expected to rebound to 4.4% annual growth. Central Europe is considered the weakest area in the Europe-Central Asia region, with economic output growth of just 1.9% this year.
The World Bank includes the following countries in its forecasts for the Europe and Central Asia region: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Georgia, Hungary, Kazakhstan, Kosovo. Kyrgyzstan, Moldova, Montenegro, North Macedonia, Poland, Romania, Russia, Serbia, Tajikistan, Turkey, Ukraine and Uzbekistan.