The World Bank in Europe and Central Asia

Russia’s invasion of Ukraine has dimmed prospects of a post-pandemic economic recovery for emerging and developing economies in the Europe and Central Asia region. Regional output is now expected to contract by 0.2 percent in 2022, reflecting negative spillovers from the invasion.

Growth projections for 2023 have been downgraded for most countries in the region due to the ongoing impacts of the war in Ukraine, weakening growth prospects in the euro area, tighter-than-anticipated monetary policy, and severe commodity market shocks. GDP is set to expand at an anemic pace of 0.3 percent in 2023.

Ukraine’s GDP is projected to contract by about 35 percent in 2022, with economic activity scarred by the destruction of productive capacity, damage to arable land, and reduced labor supply. Recovery and reconstruction needs across social, productive, and infrastructure sectors are estimated at around $349 billion, which is more than 1.5 times the size of Ukraine’s pre-war economy in 2021. The invasion of Ukraine has also triggered the largest human displacement crisis in the world at present.

Learn More: Regional Economic Update Fall 2022

Updated 4 October 2022

World Bank Regional Strategy

The World Bank works with countries in Europe and Central Asia to eliminate poverty and promote shared prosperity, through boosting human capital, enabling markets, facilitating green transitions, and building & strengthening institutions. These medium-term objectives remain highly relevant as the World Bank supports countries in the region facing the overlapping crises of the war in Ukraine, the ongoing COVID-19 pandemic, and surges in food and energy prices.

Boosting human capital for inclusive productivity in a world of changing work. This includes continuing to address near-term risks to human capital due to the COVID-19 crisis, and the impacts of the spillovers of the war in Ukraine, including emergency health and social relief, while helping our clients to build adaptive and inclusive human capital through access to quality health, education, social protection services and jobs.

Enabling markets for the private sector to compete in the knowledge-intensive global economy. In addition to helping our clients reinvigorate private investment to support sustainable growth, this means working to raise productivity and development of a competitive private sector through critical market reforms, public-private partnerships, financial sector diversification, productivity-enhancing digitization, and fintech to increase access to finance.

Facilitating green transitions to low-carbon, sustainable economies. This includes helping our clients with innovative engagements to support decarbonization, natural capital renewal, climate & disaster risk management, inclusive infrastructure, and just transitions.

Building and strengthening institutions to be open and responsive and to deliver quality services to people. In addition to continuing to work on long-standing issues as part of crisis response and recovery, this means ensuring sound macro-financial policies & regulatory frameworks; debt management; strengthening institutions, governance & state effectiveness, including SOE reforms; and policy & institutional modernization to support infrastructure services.

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).

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.