ASTANA – Economic growth in Europe and Central Asia (ECA) has slowed but remains resilient amid global and regional challenges, according to the World Bank’s Europe and Central Asia Economic Update: Jobs and Prosperity, released on Oct. 7.
The World Bank building. Photo credit: www.worldbulletin.net.
Economic growth in Europe and Central Asia eased to 2.4% in 2025.
Regional GDP is projected to grow by 2.4% this year, down from 3.7% in 2024, mainly due to weaker expansion in Russia. Excluding Russia, which accounts for approximately 40% of the region’s output, growth is expected to remain steady at around 3.3% this year and next.
World Bank Vice President for ECA Antonella Bassani said developing economies in the region must implement bold reforms to turn resilience into stronger growth in productivity, output, and employment. She emphasized the need to strengthen the private sector, improve education, and enhance international, regional, and domestic connectivity while attracting more private capital.
The report emphasizes that investing in infrastructure, enhancing the business environment, and mobilizing private capital are crucial to boosting productivity and creating high-quality jobs. It calls for investment in physical and human infrastructure, including vocational and higher education. Women and youth remain underrepresented in the labor force, representing untapped potential.
Although employment in ECA has risen by 12% over the past 15 years, driven by the services sector, most new jobs remain low-skilled with limited earning potential.
Demographic challenges add pressure: the working-age population is projected to shrink by 17 million in the coming decades, particularly in Eastern and Central Europe and the Western Balkans. In contrast, Central Asia and Türkiye are expected to see growth in their working-age populations, creating distinct labor market pressures.
Structural constraints, such as small firms that rarely scale up, weak financial and venture markets, underperforming education systems, limited competition, and dominant state-owned enterprises, continue to hold back productivity.
“Each country can tailor its approach to best use its assets – human talent, infrastructure, institutions, and natural resources. Expanding job opportunities across industries gives policymakers a real chance to tackle the jobs challenge and generate growth,” said World Bank Chief Economist for ECA Ivailo Izvorski.
