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Harnessing AI could improve productivity and help offset demographic pressures
WASHINGTON, October 6, 2026—Amid higher energy prices, heightened uncertainty, and weaker economic expansion in trading partners, growth in Europe and Central Asia* is likely to slow to 2.2% in 2026 from 2.6% in 2025, according to the World Bank’s latest Europe and Central Asia Economic Update: Making AI Work: Jobs, Firms, and Productivity, released today.
The slowdown is broad-based, reflecting weakness in most countries in the region. Excluding Russia, which accounts for about 40% of the region’s output, growth is expected to moderate to 3% in 2026 from 3.7% in 2025. Global commodity-market disruptions have had a more limited impact than initially expected.
- Developing economies in the region continue to show resilience due to reduced energy intensity, stepped-up government policies, and robust domestic demand. To increase productivity and help offset a shrinking working-age population, countries can harness the potential of artificial intelligence by strengthening foundational educational and managerial skills, while preparing labor market and social protection institutions for this disruptive change.
