The World Bank recently announced during 2014 annual meetings between World Bank and IMF that GDP growth in the Emerging Europe and Central Asia (ECA) region is slow, but should improve up to 2.1 percent in 2015.

“The Emerging Europe and Central Asia region is facing some daunting challenges amid a cloudy outlook for growth,” Vice-President for the World Bank’s Emerging Europe and Central Asia region Laura Tuck said. “The tensions in Ukraine have clearly had an impact on the country’s growth and have disrupted economic activity. But many of the structural problems that confront countries in the region existed before the crisis and still need to be urgently addressed.”

Central and East European (CEE) countries should see growth increase to 2.5 percent in 2014 and 2.8 percent in 2015, which is an improvement over the past two years. Unemployment rates are declining in Estonia, Latvia and Lithuania, where reforms and new policies were quickly implemented. Growth is expected to decline in the Western Balkan s from 2.4 percent in 2013 to 0.6 in 2014, but should improve to 1.9 percent in 2015

The situation in the Ukraine will impact the GDP growth rate, which is expected to contract eight percent in 2014 and an additional one percent in 2015. The conflict has made it difficult for the government to collect taxes and has caused problems in economic activity. Revenue performance is weak and the growth of the Naftogaz deficit makes it difficult to attain fiscal adjustments.