INSIGHTS
The ECA region is expected to experience an average growth of 2.7 per cent over 2024-25 as inflation eases, domestic demand recovers, and the external environment improves.
Fallout from the Ukraine invasion, along with high inflation and global interest rates, dampen the economy's prospects.
Governments are responding with social assistance and subsidies.
Growth in the Europe and Central Asia (ECA) region is expected to increase to an average of 2.7 per cent over 2024-25 as inflation eases, domestic demand recovers, and the external environment improves, as per the World Bank. The ongoing fallout from Russia’s invasion of Ukraine, combined with high inflation and higher global interest rates, are dampening prospects for the regional economy.
Due to differences in consumption patterns and varying price increases across goods and services, lower-income households in almost every country in the region faced significantly higher inflation than the wealthiest households. In fact, inflation was 2 percentage points higher for the poorest 10 per cent of the population compared to the wealthiest 10 per cent, with some countries exceeding 5 percentage points, according to the World Bank’s latest economic update from the region titled ‘Weak Growth, High Inflation, and a Cost-of-Living Crisis’.
The report’s findings have strong policy implications, as policies targeting vulnerable populations need to take into account the different inflation rates faced by households of different income levels.
Read more about World Bank projects ECA region to grow by 2.7% in 2024-25
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