World Bank updates GDP forecast for Europe, Central Asia

ISTANBUL

The World Bank has updated its forecast for emerging and developing economies (EMDE) in Europe and Central Asia (ECA) for 2020, to minus 4.4 percent from minus 4.7 percent in the previous report in June.

Regional output collapsed in the first half of this year due to the fallout from the COVID-19 pandemic, said the report released on Oct. 7.

After the peak period of the pandemic in March and April, several countries eased measures starting in May and June, and economic data began to turn positive again.

The report stressed that GDP growth is expected to recover next year but there are uncertainties related to the pandemic, such as the availability and distribution of a vaccine.

The report’s GDP growth expectation for the EMDE ECA was minus 4.4 percent for 2020 and 3.3 percent for 2021.

The World Bank expected the largest decline in Montenegro (minus 12.4 percent), Kosovo (minus 8.8 percent) and Albania (minus 8.4), while only Tajikistan’s and Uzbekistan’s economies are forecast to grow positively, by 1.6 percent and 0.6 percent, respectively.

Turkey’s economy is expected to shrink 3.8 percent in 2020 and grow by 4 percent in 2021, according to the report.

ECA countries include Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Georgia, Kazakhstan, Kosovo, Kyrgyzstan, Moldova, Montenegro, North Macedonia, Poland, Romania, Serbia, Tajikistan, Turkey, Turkmenistan, Ukraine and Uzbekistan.

GDP in oil-rich Azerbaijan is expected to contract by 4.2 percent in 2020, down from a previous forecast of 3 percent, but the bank expects a 1.9 percent rebound next year, up from a previously forecast of 2.5 percent.

“Activity is expected to firm in Azerbaijan in 2021 as oil prices stabilize, but the overall recovery will be muted.”

The World Bank drafted its forecasts before a flare-up in the conflict between Azerbaijan and Armenian forces over Azerbaijan’s breakaway Nagorno-Karabakh region.