Washington, October 7, 2025 – Economic growth in Europe and Central Asia (ECA) has slowed, but the region remains resilient amidst the continued and regional challenges of global and regional challenges, according to the World Bank’s latest European and Central Asia economic updates, employment and prosperity.
Regional GDP is likely to increase essentially by 2.4% this year, down from 3.7% in 2024, leading to a weaker pace of expansion, primarily in the Russian Federation. Excluding Russia, which accounts for around 40% of the region’s production, growth could barely change at around 3.3% this year and next year.
“Developing countries in this region need to make bold reforms to transform resilience into stronger growth in jobs that fit productivity, productivity and the changing demographics of the region, and take advantage of the natural benefits.” “It is important for the country to strengthen the private sector, improve education, better connect internationally, regionally and nationally, and attract more private capital. The regional challenge is to increase employment opportunities and turn low-skilled jobs into high-quality employment.”
A report focusing specifically on employment found that investment in infrastructure, improving the business environment and mobilizing private capital are important for jumping productivity.
Countries should start by investing in employment foundations, which are physical and human infrastructure. It is also necessary to improve the quality of education, especially the quality of occupation and higher education. It is still possible that it is undeveloped among women and young people who are underestimated in the workforce.
The region has produced important jobs over the past decades, but slowing growth, slowing productivity and weakening reform momentum amplifies work challenges. ECA employment has increased by 12% over the past 15 years, but the report finds that most opportunities have been in relatively low-skill jobs where revenue potential is limited.
Demographic headwinds threaten labor market resilience: The working-age population is projected to decline by 17 million in the coming decades, concentrated in Eastern Europe, Central Europe and the Western Balkans. In Central Asia and Türkiye, the working-age population increases, putting pressure on the labour market of different kinds. Structural obstacles limit the possibility of ECAs, including the abundance of small and medium-sized enterprises that rarely scale up, the untapped credit and venture finance market, low-performance education and training systems, conquered competition, state-owned enterprises (SOEs) that reduce business dynamism and market efficiency.
Ivairoyzvorsky, chief economist at the World Bank of Europe and Central Asia, said: “Since different industries require different skill sets, expanding employment opportunities can benefit almost all workers. Focusing on these areas gives policymakers a real opportunity to tackle employment challenges and create growth.”
