EBRD Reduces 2025 Growth Projection Amid Trade Uncertainty
(MENAFN) The European Bank for Reconstruction and Development (EBRD) on Tuesday revised its 2025 growth projection down by 0.2 percentage points, citing increased trade policy uncertainty as the main factor. The bank now expects regional growth to reach 3% next year, reflecting the negative impact of tariff hikes and global policy shifts that have disrupted trade and strained supply chains, according to its latest Regional Economic Prospects report.
"This downward revision follows a similar 0.3 percentage point cut in February and reflects a confluence of global headwinds, as captured in the title of the new report, 'Uncertain times,'" the report noted.
These challenges include a significant rise in trade and economic policy uncertainty, declining external demand, and the effects of recent tariff increases, both direct and indirect.
“Although understanding the full macroeconomic effects of the newly announced tariffs will take time, it is already clear that our regions have entered a period of heightened uncertainty and slower growth,” commented Beata Javorcik, the EBRD's Chief Economist.
She added, “Reducing trade tensions through constructive dialogue and achieving consensus on trade policy among key stakeholders are crucial, as prolonged uncertainty carries painful economic costs."
Despite the lowered forecast for 2025, the EBRD maintained its 2026 growth projection at 3.4%. Among the countries covered by the bank, Slovakia is expected to experience the largest direct GDP impact from U.S. tariff hikes (0.8%), followed by Jordan (0.6%) and Hungary (0.4%).
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