The European Bank for Reconstruction and Development (EBRD) has increased the forecast of economic growth for 2025. year to 3.1 percent, which is the first expected growth in more than a year.
However, in the latest report, the effects of trade tariffs, growing public debt and extended war conflicts will negatively affect growth in 2026. Years.
The report includes economies in Eastern Europe, Central Asia, the Middle East and Africa, with increasingly more pronounced performance difference between Eastern European countries and other regions. The latest forecast does not include the latest Members of the EBRD, Iraq and six countries of sub-Africa, including Nigeria, Kenya and Ghana, although they are first involved in other parts of the report.
The main economist of the EBRD Beata Javorcik told Reuters that the report shows “the story of multiple pressure points and divergence between Eastern Europe and other regions in which we operate.”
According to Javarcik, growing public debt, re-boosting inflation, extended wars and trade barriers threaten all economies within the EBRD. Although American imports from these countries increased in the first half of the year, that growth was concentrated in the first quarter, before the tariffs entered into force.
“We’ll see the tariffs start in the future,” she warned.
Eastern European countries, including Poland, Hungary and Romania, face pressure to reduce public spending, while for Central Asia, Subsaharac Africa and Turkey predicts faster growth.
However, Javarcik warned that debt servicing costs as a share in GDP increased in most countries, which throws suspicion of long-term sustainability of public finances.
– There was a change in the opinion of policy makers around the world, who now act as if the sustainability of debt no longer cares, as if everyone forgot the recent Greece experience, “she said.
Javorcik pointed out that public debt in the EBRD countries “very high”, approximately at the level of 1990. years, while the costs of servicing that debt became a significant item in budgets. In extreme cases, such as Egypt, debt servicing costs are about 14 percent of GDP, while in Hungary about four percent, and in the Poland two percent.
Inflation is also rising again, reaching the average 6.4 percent in the EBRD regions in July 2025. It is significantly below the climax. Year (17.5 percent), above is the expectations of the EBRD and increasingly encouraged by demand, which reflects expansive fiscal policies.
The EBRD further reduced the growth forecast for Ukraine in 2025. years, due to the exhausting war with Russia entering the fourth year, weak yield and increasingly pronounced lack of labor.
The Russian economy also enters the challenging period, a maple, with burdened public finances and increasingly strict limits on oil and gas exports have warned.
– There is an unpleasant combination and further high inflation and slowdown in growth, “he said, adding that Russia could be on the way to stagnation, written by Fena.
