The World Bank says the emerging and developing economies in Europe and Central Asia are on course for their worst recession since the global financial crisis of 2008.
In an update of its outlook for the region released on October 7, the Washington-based lending arm of the International Monetary Fund said it expected the region’s economies to
contract by 4.4 percent this year before recovering in 2021 to growth between a range of 1.1 percent to 3.3 percent.
“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,” she added.
The pandemic-induced contraction in 2020 is also expected to increase poverty in all countries in the region, the update said, noting that with a per day poverty line of $3.20 per, an additional 2.2 million people may slip into poverty. If that line is set at $5.50 per day, a level customarily used in upper-middle-income countries, the jump in the number of impoverished could be as high as 6 million people.
It also warned the pandemic had adversely affected education and health in the region.
“Good-quality higher education is critical for people to remain competitive in fast-changing labor markets,” it said.
“Improving higher education in countries of Western Balkans, Eastern Europe, South Caucasus, and Central Asia would also help them retain their high-skilled labor force in the face of sustained out-migration,” it added.
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