The European Bank for Reconstruction and Development said Wednesday that the coronavirus crisis will deal a “massive” blow this year to the 37 countries it invests in, but the economies of Central and Eastern Europe could to bounce back quickly.

In its latest report, the bank forecast the economies in its operating region will contract about 3.5% this year, but will rebound next year. States that joined the European Union in 2004 and 2007 may contract collectively by 4.3% this year due to the impact of the pandemic, before rebounding to 4.3% growth in 2021, the bank said.

The report finds that Central and Eastern EU member states suffered far less than other regions, and that these countries are paving the way for the possibility of capitalizing on developing supply chains for countries that are looking to lessen their dependence on China. “Output in the region is set to fall in 2020, but bounce back strongly in 2021”.

The report concludes with a grim assessment: “if social distancing remains in place for much longer than anticipated, the recession may be much deeper, with the 2019 levels of output per capita not attained again for years to come”.

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