World Bank Forecasts 2.5% Economic Growth for Europe and Central Asia in 2025

ASTANA – Economic growth in the developing economies of Europe and Central Asia is projected at 2.5% for 2025-26, reflecting weaker external demand and a slowdown in Russia, according to the World Bank’s Economic Update released on April 23.

The World Bank building. Photo credit: www.worldbulletin.net.

In 2024, growth across the region stabilized at 3.6%, driven by private consumption and supported by robust real wage increases, higher remittances, and expanded consumer borrowing, all of which helped offset weak external demand caused by low growth in the European Union.

However, rising prices for food and services pushed inflation higher, reaching 5% year-on-year by February 2025, up from 3.6% in mid-2024. In response, several central banks raised policy rates or delayed planned further easing.

Central Asia is expected to remain the fastest-growing sub-region through 2025-26, though growth is forecast to ease to 4.7%, mainly due to a slowdown in Kazakhstan’s oil sector, declining exports, and the normalization of remittance inflows.

World Bank Vice President for Europe and Central Asia Antonella Bassani noted that while the region maintained steady growth last year, sustaining it has become more challenging amid global uncertainty, geoeconomic fragmentation, and weak expansion among key trading partners.

“To achieve stronger economic expansion over the long term, it is crucial for the countries in the region to accelerate domestic structural reforms that foster a dynamic and innovative private sector, entrepreneurship and technology adoption,” she said.

The report emphasized the need for countries to boost innovation, support young companies, deepen financial markets, and increase investments in research and development.

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