Europe and Central Asia: Slower Growth with Global Headwinds (+... +... +... +...)

Europe and Central Asia: Slower Growth with Global Headwinds 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 https://www.worldbank.org/en/news/press-release/2026/10/06/europe-and-central-asia-slower-growth-with-global-headwinds Europe & Central Asia https://www.worldbank.org/ext/en/region/eca Europe and Central Asia Economic Update, October 2026: Making AI Work: Jobs, Firms, and Productivity Amid higher prices for imported energy, heightened uncertainty, and weaker economic expansion in the European Union, growth in Europe and Central Asia (ECA) has slowed further in 2026, with a gradual but uneven recovery expected through 2028. Against this difficult backdrop, artificial intelligence (AI) could help offset declining productivity. Yet AI's transformative potential exceeds the region's capacity to absorb it. About one in five workers in ECA holds a job exposed to AI, but fewer than one in ten firms use AI, roughly half the share in the EU. Many of the digital foundations for AI are already in place, but the region faces shortages of computing capacity and weaknesses in data readiness. Governments can help by expanding access to affordable computers, strengthening skills, and investing in data as a public good. Confusing adoption and adaptation with innovation may lead governments to invest in building national models at unnecessary cost. The main risk over the next decade is too little adoption and adaptation of AI across the region, not too much. https://openknowledge.worldbank.org/entities/publication/894e5586-bb63-4fb4-b5a2-cd4a034604d5 Making AI Work Developing economies in Europe and Central Asia continue to demonstrate economic resilience despite slowing growth, high energy prices, and heightened global uncertainty. The region’s economic activity is projected to ease to 2.2% this year from 2.6% in 2025. Artificial intelligence (AI) has the potential to offset declining productivity and reinvigorate economic expansion, but organizational constraints, limited computing capacity, and poor data readiness are holding the region back. To capitalize on AI's potential, countries will need to expand affordable access to computing capacity while strengthening foundational, digital, and managerial skills. https://www.worldbank.org/en/region/eca/publication/europe-and-central-asia-economic-update