Central and West Asian economies saw a relatively fast V-shaped recovery from the economic slowdown brought on by the coronavirus disease (COVID-19) pandemic. But the 2022 Russian invasion of Ukraine has slowed their growth momentum once again—from 5.7% growth in 2021 to 3.9% forecast for 2022.

With the Russian Federation the region’s major trade partner, the invasion and associated sanctions have affected all Central and West Asian economies. Most private sector businesses have suffered, though to differing degrees by country. A third of micro, small, and medium-sized enterprises (MSMEs) in the region rely on exports, and they have been heavily affected.

Policymakers across the region prioritize MSME development and financial inclusion as part of their growth strategies as they strive for resilient, diversified, and sustainable economies. Finance, especially access to growth capital, is critical for MSMEs. National financial inclusion strategies—including financial education programs for MSMEs—are also important. However, increased global economic uncertainty makes it more difficult for the region’s governments to design feasible and effective MSME policies. To provide the right policy support for MSME development, they need timely access to comprehensive, comparative databases and information on the evolving business environment and other factors.