Growth in the region decelerated to an estimated three-year low of 2% in 2019, reflecting a sharp slowdown in Turkey as a result of acute financial market pressure in 2018, as well as in the Russian Federation amid weak demand and cuts in oil production. Sustained weakness in exports growth in the region has continued amid slowing manufacturing activity and investment.
In Russia, softer-than-expected investment and trade, together with a continuation of international economic sanctions, resulted in a growth slowdown to an estimated 1.2%. In Turkey, industrial production and manufacturing data suggest that the economy began to stabilize in late 2019, following the disruptions from acute financial market pressures in the previous year. Even so, growth slowed sharply for the year, falling to near zero.
In Central Europe, the boost to private consumption in early 2019 from rising real wages and government transfers helped to sustain above-potential growth. In the Western Balkans, a deceleration in public investment in Kosovo, in manufacturing in Serbia, and in export growth in Albania and Serbia contributed to a moderation in growth to an estimated 3.2% last year. Private consumption, strong manufacturing, and a recovery in mining production in Armenia supported firming growth in the South Caucasus to an estimated 3.7%.