“Economic growth in developing countries of the Europe and Central Asia (ECA) region is likely will slow significantly this year due to the effects of the conflict in the Middle East, geopolitical tensions and trade fragmentation” – indicates the World Bank (WB) in its report on growth prospects for this region published on Wednesday.
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The bank warns that “higher energy costs weaken consumption growth and uncertainty negatively affects investments.”
At the same time, it states that the main risk to the implementation of forecasts is “a potential long-term and more intense conflict in the Middle East.”
– He could disrupt global supplies of energy and fertilizers, thereby significantly raising energy and food prices and significantly limiting economic growth in the region – he emphasizes.
The World Bank presented a forecast for Poland
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Forecasts for Poland are down
According to the report, economic growth in the ECA region will weaken to 2.1%. in 2026, that is by 0.1 percentage point. less than the World Bank forecast in January. In 2027, the World Bank expects growth of 2.3% for the region. (a decrease of 0.4 percentage points compared to the January forecasts).
How does the crisis in Iran translate into the Polish economy? According to the World Bank, in 2026 Poland's GDP will grow by 3.1%. (at 3.6% growth in 2025). This is by 0.1 percentage point. less than the Bank assumed in January. In turn, in 2027, the growth in Poland is expected to be 2.6%. — in January, the World Bank forecast 2.9 percent. This means that next year we will feel the effects of the war even more severely than this year.
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For Ukraine, the World Bank forecasts 1.2 percent. growth in 2026 (0.8 percentage point less than expected in January) and as much as 4 percent. growth in 2027 (the same amount was assumed in January).
In turn, growth in Russia is expected to slow down to 0.8% in 2026. (from 1% in 2025) – this is the same as the January forecasts. For 2027, the World Bank forecasts growth for Russia of 0.7%. — in January he estimated it would be 0.3 percentage points. more.
According to the World Bank's report, growth in Central Asia may slow down to an average level of 4.9%. in 2026-27, as oil production in Kazakhstan stabilizes.
“Central European economies are likely to grow by around 2.4% this year, before growth slows to 2.3% in 2027. Weaker consumption will be partially amortized by public investments financed by the European Union” – says the World Bank.
In turn, growth in the Western Balkans is forecast at an average level of 3.1%. in the next two years. It is to be supported by infrastructure investments and strong exports of services.
It will be necessary to counteract the effects of the crisis
According to the World Bank, many countries will need to take steps to counteract the effects of the crisis, with particular emphasis on targeted actions to protect the most vulnerable social groups.
Therefore, it recommends continuing reforms supporting the growth of companies and job creation in order to mitigate the effects of the crisis and strengthen the resilience of economies and the dynamics of growth in the long term.
“The slowing rate of productivity growth in many ECA countries over the past decade has led some policymakers to complement broad economic reforms with industrial policies — government interventions designed to promote specific sectors or firms,” notes the World Bank.
At the same time, it estimates that the countries of the region would benefit from more targeted support and activities that build future competitiveness instead of perpetuating the existing weaknesses of their economies.
In this context, it recommends ambitious reforms that “modernize the business environment, stimulate entrepreneurship and improve the quality of education.”
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“Targeted public support, such as the creation of industrial parks or special economic zones, is the most important industrial policy tool that can help respond to well-identified market deficits. However, industrial policies must be applied sparingly and only temporarily,” says the World Bank.
In areas where industrial policy is implemented, the report's authors recommend supporting new and dynamic companies and ideas in the private sector rather than protecting “dominant players such as state-owned enterprises”. “Industrial policy must enhance, not undermine, competition,” argues the World Bank.
