Growth is set to slow this year across many developing markets as soaring energy costs and supply chain disruptions caused by the Middle East war weigh on activity, the European Bank for Reconstruction and Development (EBRD) said Wednesday.
Economies in the 41 countries covered by the development finance institution are expected to expand at a slower-than-forecast 3.1% this year, 0.5 percentage points below the level forecast in February.
"This report is a story of the continued energy shock," EBRD Chief Economist Beata Javorcik told Reuters. "It hit at the moment that was challenging for Europe, a moment where the sentiment in European manufacturing has been weak."
The bank flagged slower growth in key nations including Türkiye, Ukraine and Egypt.
But the biggest revisions from its February forecast came in Lebanon and Iraq, slashed by 6 percentage points and 5.1 percentage points, respectively. Both economies are expected to contract this year – Lebanon by 2% and Iraq by 1.5%.
