EBRD Lowers Regional Growth Forecast, Warns on Tariffs

The EBRD warned that U.S. tariffs, rising Chinese competition and limited fiscal space are weighing on the economies where it operates and revised regional growth to about 3.1% in 2025 and 3.3% in 2026. It cut Ukraine’s 2025 real GDP forecast to 2.5% because of war-related uncertainty, energy infrastructure damage, labour shortages, a widening current account deficit and still-elevated inflation. Türkiye’s outlook was upgraded to roughly 3.1% in 2025 and 3.5% in 2026, helped by eased regional tensions and sectoral strengths despite persistent financing risks. The summary notes that other agencies paint mixed pictures: the OECD raised its 2025 global-growth forecast to 3.2% partly due to front‑loaded trade ahead of higher U.S. tariffs, and the WEF warned of longer-term structural slowdowns and widening divergences between advanced and emerging economies. National reports highlight resilience amid headwinds — the RBI points to India’s strong domestic drivers, Ibec says Ireland shows momentum but is vulnerable to external shocks, and Italy expects modest growth of around 0.6% in 2025. Forecasters cautioned that near‑term upside from front‑loading could be undone if tariffs escalate or fiscal and financing pressures deepen.