The document summarizes economic growth and prospects in the Europe and Central Asia region. It notes that growth strengthened in 2013 to 3.4%, up from 2% in 2012, supported by increases in external demand. However, growth varied among countries, with energy and commodity exporters maintaining strong growth while others saw mixed performance. The outlook predicts sustained gradual acceleration of regional growth to 3.8% by 2016, although this depends significantly on the strength of recoveries in Europe and Russia.

1. Global Economic
Prospects
January 2014
Europe & Central
Asia Region
Mizuho Kida
World Bank
January 2014
www.worldbank.org/globaloutlook

2. Growth in the ECA region has
strengthened in 2013 to 3.4% up
from 2% in 2012.

3. Growth in the Europe & Central Asia
region has strengthened in 2013 to
3.4% up from 2% in 2012.

4. Growth strengthened in the region supported
by increases in external demand
Quarterly GDP (% change, sa)

5. Growth strengthened in the region supported
by increases in external demand
Quarterly GDP (% change, sa)
Export volume (% change, 3m/3m, sa)

6. Growth strengthened in the region supported
by increases in external demand
Quarterly GDP (% change, sa)
Export volume (% change, 3m/3m, sa)

7. Among the Commonwealth of
Independent States, growth
performance has been mixed.

8. Energy-commodity exporters maintained a
strong growth
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0
Impact of commodity price changes on trade balance (%GDP, 2013)

9. Energy-commodity exporters maintained a
strong growth
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0
Impact of commodity price changes on trade balance (%GDP, 2013)

10. Energy-commodity exporters maintained a
strong growth
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0
Impact of commodity price changes on trade balance (%GDP, 2013)

11. Energy-commodity exporters maintained a
strong growth
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0
Impact of commodity price changes on trade balance (%GDP, 2013)

12. Energy-commodity exporters maintained a
strong growth
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0
Impact of commodity price changes on trade balance (%GDP, 2013)

13. Energy-commodity exporters maintained a
strong growth
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0
Impact of commodity price changes on trade balance (%GDP, 2013)

14. Energy-commodity exporters maintained a
strong growth
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0
Impact of commodity price changes on trade balance (%GDP, 2013)

15. Among the CIS countries, strong remittance inflows
partially mitigated terms of trade shocks
Remittances (%GDP, 2013)
60
50
40
30
20
10
0

16. Capital inflows to the region began
strong, but weakened after the mid-year
tapering announcement and ensuing
volatility.

17. Capital inflows to the region began strong, but
weakened after the mid-year tapering
announcement and ensuing volatility
16,000
Gross Capital Flows to ECA
(US$ mn)
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
I
II
III
2009
IV
I
II
III
2010
IV
I
II
III
2011
IV
I
II
III
2012
IV
I
II
III
2013
IV

18. Across the region, the banking sector remains
weak, saddled with an overhang of nonperforming loans
45
40
35
30
25
20
15
10
5
0
Bank nonperforming loans to
total gross loans (%)

19. Across the region, the banking sector remains
weak, saddled with an overhang of nonperforming loans
45
40
35
30
25
20
15
10
5
0
Bank nonperforming loans to
total gross loans (%)

20. Across the region, the banking sector remains
weak, saddled with an overhang of nonperforming loans
45
40
35
30
25
20
15
10
5
0
Bank nonperforming loans to
total gross loans (%)

21. Across the region, the banking sector remains
weak, saddled with an overhang of nonperforming loans
45
40
35
30
25
20
15
10
5
0
Bank nonperforming loans to
total gross loans (%)

22. Across the region, the banking sector remains
weak, saddled with an overhang of nonperforming loans
45
40
35
30
25
20
15
10
5
0
Bank nonperforming loans to
total gross loans (%)

23. Across the region, the banking sector remains
weak, saddled with an overhang of nonperforming loans
45
40
35
30
25
20
15
10
5
0
Bank nonperforming loans to
total gross loans (%)

24. Growth outlook for the region is that
of sustained gradual acceleration, from
3.4% in 2013 to 3.8% by 2016.

25. Growth outlook for the region is that
of sustained gradual acceleration, from
3.4% in 2013 to 3.8% by 2016.

26. Growth outlook for the region is that
of sustained gradual acceleration, from
3.4% in 2013 to 3.8% by 2016.

27. Growth outlook for the region critically
depends on recoveries in Europe and Russia
Exports to the Euro Area
(percent of total exports, 2012)
-20
Hungary
Albania
Romania
Bosnia and…
Kosovo
Bulgaria
Croatia
Serbia, Rep. of
Macedonia, FYR
Kazakhstan
Moldova
Azerbaijan
Armenia
Turkey
Belarus
Montenegro, Rep.
Ukraine
Georgia
Tajikistan
Uzbekistan
Kyrgyz Republic
Exports to Russia
(percent of total exports, 2012)
30
80
0
Belarus
Ukraine
Moldova
Armenia
Lithuania
Latvia
Kazakhstan
Serbia, Rep. of
Poland
Slovenia
Turkey
Croatia
Czech Republic
Hungary
Bulgaria
Romania
Macedonia, FYR
Bosnia and…
Albania
10
20
30
40

28. Global Economic
Prospects
January 2014
Mizuho Kida
World Bank
January 2014
Europe & Central
Asia Region
www.worldbank.org/globaloutlook