Emerging and developing economies in the Europe and Central Asia region are on course to contract by 4.4 percent this year, the worst recession since the global financial crisis of 2008, says the latest edition of the World Bank’s Economic Update for Europe and Central Asia, released today. Growth is expected to recover in 2021, between a range of 1.1 percent to 3.3 percent. The outlook remains highly uncertain, however, and risks are tilted to the downside, IPN reports, quoting a press release of the WB.
The pace of recovery depends on the duration of the coronavirus (COVID-19) pandemic, the availability and distribution of a vaccine, and the degree of improvement in global trade and investment. As a result, growth in the region could be weaker than expected if the pandemic worsens.
“In such challenging times, countries in Europe and Central Asia must look beyond the immediate crises and prepare for a post-pandemic resilient recovery,” said Anna Bjerde, World Bank Vice President for the Europe and Central Asia region. “This means strengthening governance, improving the investment climate, and fostering innovation and digital development. Significant and sustained investment in quality education and health care will be especially critical.”
The pandemic-induced contraction in 2020 is also expected to increase poverty in all countries in the region. At the $3.20 per day poverty line, estimates suggest an additional 2.2 million people may slip into poverty. At the $5.50 per day poverty line, customarily used in upper-middle-income countries, the increase in poverty could be as high as 6 million people.
“Just surviving is not enough, nor is simply completing basic education. Adults need to remain healthy, active and productive throughout their lives,” said Asli Demirgüç-Kunt, World Bank Chief Economist for Europe and Central Asia. “It is especially important to reduce the health risks of obesity, smoking and heavy drinking which can jeopardize active and productive aging, and to ensure higher education institutions prepare students for the challenges of today’s job markets.”
Across the region, more than 18 percent of the population is obese, nearly 23 percent of people are heavy episodic drinkers, and nearly 26 percent are current smokers. These health risks are particularly high in Eastern Europe and Russia, where adult life expectancy is also the lowest in the region. Prevalence of these risks increases not only the likelihood of conditions such as cardiovascular disease, but also the mortality and morbidity consequences of infectious diseases like COVID-19.
