BAKU, Azerbaijan, January 11. The GDP growth in Europe and Central Asia (ECA) is expected at only 0.1 percent, Trend reports, citing the recent outlook from the World Bank (WB).
According to the report, the current forecast has been revised downward by 1.4 percentage points, since June 2022 outlook.
"Although much of the projected weakness in regional growth this year emanates from a further output decline in Russia, forecasts for 2023 growth have been downgraded for over 80 percent of ECA’s economies. This deterioration in the near-term outlook mainly reflects the impact from Russia’s cutoff of energy supplies to the EU and additional monetary policy tightening in the euro area," the report said.
The WB noted that these developments have severely affected ECA's economies, particularly in Central Europe, through high energy costs and weaker external demand for ECA goods and services.
"Recession in Russia and subdued growth in China are anticipated to weigh on activity, especially in the South Caucasus and Central Asia. Regional activity is also expected to continue to be dampened by tightening financing conditions as central banks grapple with abovetarget inflation. In all, output in 2023 is expected to fall 5.7 percent below pre-pandemic trends," the report added.
However, the GDP growth in ECA's economies is expected to rebound in 2024 to 2.8 percent. Still, the forecast has been revised downward by modest 0.5 percentage points, since June 2022, the WB said.
Meanwhile, ECA economies GDP growth is projected at 0.2 percent in 2022.