The EBRD said on Thursday war-related shocks are slowing growth across many
emerging markets. Its regional outlook cited higher energy prices, rising
borrowing costs, a European drought and the continued closure of the Strait of
Hormuz, and now expects GDP across 40 covered economies to expand 2.5% this
year, 0.6pp below its June forecast and the second consecutive downgrade. Chief
Economist Beata Javorcik warned multiple pressure points—from diesel and wheat
costs to borrowing rates—are accumulating and pose substantial downside risk.
Iraq and Lebanon suffered the biggest cuts: Iraq is now forecast to contract
about 12% this year as Hormuz closes curb oil exports; Lebanon is seen
shrinking roughly 5% amid the Israel conflict. The EBRD also trimmed forecasts
for Ukraine, citing intensified Russian attacks, and for Turkey as persistent
inflation tightens financing conditions.
