Overview

Economic Developments

Regional growth accelerated from 0.5 percent in 2015 to 1.2 percent in 2016, in line with expectations, due mainly to an easing of the recession in Russia as oil prices stabilized. Excluding Russia, regional growth slowed to 2.4 percent in 2016 from 3.5 percent in 2015, reflecting a slowdown in Turkey amid political uncertainty.

In the eastern part of the region performance was mixed: activity picked up in Ukraine after two years of deep recession, growth continued to slow in Kazakhstan, and output contracted in Azerbaijan. In the western part of the region overall growth remained robust, despite moderating in several major countries (Turkey, Poland, and Hungary).

Regional growth is expected to rise to 2.8 percent on average in 2018-19, driven mainly by a recovery in commodity exporters and Turkey. Risks remain tilted to the downside.

Source: Global Economic Prospects - January 2017: Europe and Central Asia

World Bank Assistance and Support

The Bank approved $7.3 billion in lending to the region for 42 projects in fiscal year 2016, including $7.0 billion in IBRD loans and $233 million in IDA commitments. The Bank also signed 34 Reimbursable Advisory Services agreements with 9 countries for a total of $34.1 million. These agreements provide technical advice on such issues as the reform of education systems, public sector governance and institutional capacity building, and the planning and management of infrastructure investments.

The strategy for the region seeks to support clients in adjusting to the new normal given increasing vulnerabilities and risks. To that end, the Bank is supporting macroeconomic stability and advising on the policy response to currency pressures; working with clients to address the challenges of forced displacement and declining remittances; advising clients on budgets to support key reforms; supporting the development of safety nets; and helping countries to prioritize investment. At the same time, the Bank continues to assist in tackling the structural and long-term challenges affecting the region.

The Bank invests in macroeconomic growth, good governance, competitiveness, and job creation, as well as in improving public sector governance and ensuring good-quality public services. Bank-funded programs aim to support the resiliency and efficiency of financial sectors and banking systems, and also to modernize and expand transport infrastructure in order to support growth, connectivity, and competitiveness.

The Bank works with client countries to develop human capital and support inclusion through supporting the design and implementation of reforms to improve the efficiency and fiscal sustainability of pension, social protection, education, and health care systems.

Climate adaptation and energy efficiency remain strategic priorities for Europe and Central Asia, the world’s most energy-intensive developing region. The Bank advises on policy reforms that would increase energy efficiency, and provides investments and analytical services to improve climate resilience in many countries.

Results

We work with client countries to fight poverty and boost shared prosperity by helping them build more responsible institutions, increase private investment, improve service delivery, upgrade infrastructure, protect the environment, support human development, and empower marginalized groups.

In order to deliver integrated solutions that help countries address their development challenges, we regularly look at where we are achieving results and making an impact. By measuring and monitoring those results, we can then improve the way we support our clients and achieve better development outcomes.

Find out more about our results in Europe and Central Asia.

Reimbursable Advisory Services (RAS)

Middle-income countries interested in highly specific knowledge services that exceed what the Bank can finance from its own resources are increasingly accessing Bank technical expertise using Reimbursable Advisory Services (RAS).

Find out more about Reimbursable Advisory Services.

Analytical Work Highlights

In addition to its financial products and RASs, the Bank produces important research about critical issues in the region. Through its analytical work, the World Bank aims to bring global knowledge and adapt it to the needs of ECA countries.

Find out more about our publications and research on Europe and Central Asia.

European Union, European Commission, and other institutions

The World Bank’s ECA region has a strategic partnership with the European Union (EU), and is working with the European Commission (EC) and European international financial institutions (IFIs) to improve the capacity of ECA’s EU-member clients to absorb EU funds.

The Bank works closely together with EU institutions, European IFIs (European Investment Bank [EIB] and the European Bank for Reconstruction and Development [EBRD]), and the International Monetary Fund (IMF) as part of the second Vienna Initiative, which aims to improve banking systems and coordination among banking regulators in EU and non-EU countries.

The World Bank Group, the EBRD, and the EIB Group came together in November 2012 for a new Joint International Financial Institution (IFI) Action Plan. One of the most important priorities under the Action Plan was to ensure continued financing for SMEs that are key drivers of innovation and job creation in the region.

ECA works on Roma inclusion across the region in collaboration with various partners, including the European Commission, the Roma Education Fund, and a variety of national Roma agencies.

The Bank is also working with the EurAsian Economic Community’s (EURASEC) Anti-Crisis Fund and with the Eurasian Development Bank to provide parallel financing for low-income ECA countries.



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