Economic growth in the Europe and Central Asia region is projected to decelerate to 1.8 percent in 2019, down from 3.2 percent in 2018. The slowdown partly reflects substantial weakness in Turkey, following acute financial market stress last year, as well as sluggish activity in Russia amid oil production cuts.
Regional growth is projected to improve in 2020–21, but growth numbers mask substantial sub-regional variation, with Central Europe sharply decelerating, as Central Asia delivers robust growth.
External risks to the region include spillovers from weaker-than-expected activity in the euro area and escalation of global policy uncertainty.
Renewed financial pressures in Turkey could also disrupt regional growth, while the possibility of sharp energy price declines is a downside risk to the region’s energy exporters.
In Central Asia and Eastern Europe, slowing activity in Russia could dent remittance inflows, which account for an important proportion of income.
Read More: Regional Economic Update Fall 2019