In 2022, the growth rate in Europe and Central Asia will decline to 3 points – almost half compared to 2021, as tighter macroeconomic policies and new waves of COVID-19, including its “omicron” strain, will have a further negative impact on demand. This is stated in the report of the World Bank, reports the press service of the UN.
Against the background of the winding down of fiscal support measures, a further slowdown of economic growth is projected in the region for 2023, with the rate not exceeding 2.9 percent.
The stimulus effect of external demand is expected to fade in 2023 as global and euro area growth slows and commodity prices fall.
GDP per capita in 2023 is projected to be about 1.5 per cent below its pre-pandemic level.
Experts associate the main risks in the economy with the risk of new outbreaks of COVID-19, especially in countries with low levels of vaccination.
Given the close financial and trade ties of the countries of Europe and Central Asia with both the rest of the world and the euro zone, a prolonged outbreak of the pandemic in other parts of the world could lead to negative side effects for the region.
The region’s energy-exporting countries remain vulnerable to large swings in global commodity prices. The region’s future prospects are also clouded by the possibility of financial turmoil, especially given the risk of exceeding inflation targets in 2023.