The European Bank for Reconstruction and Development said the monetary policy easing of the European Central Bank has lifted the outlook for economies in central and south eastern Europe.
However, prospects further to the east of the transition region have worsened due to the ECB’s quantitative easing.
In the latest Regional Economic Prospects, released Thursday, the EBRD projected overall stagnation in 2015 across all 35 countries covered and a meagre expansion of just 1.4 percent in 2016.
Quantitative easing by the ECB, the weaker euro and lower oil costs are also benefiting economies in south-eastern Europe.
However, the deep recession in Russia is having larger-than-expected negative spill over effects on countries with which it has strong economic links.
The Russian economy is expected to contract 4.5 percent instead of 4.8 percent estimated in January, and to fall 1.8 percent next year. The lender warned that Russia may face a protracted period of slow growth or stagnation.
It forecast Ukraine to shrink sharply by 7.5 percent in 2015, worse than a 5 percent fall projected in January. For 2016, it estimated 3 percent expansion.
Greece, the EBRD’s newest recipient country, has been badly hit by fears that the country may default on its external debt obligations and even exit from the Eurozone, it said. Greece is expected to stagnate this year before expanding 2 percent next year.
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