EBRD trims 2026 growth outlook amid energy, water and trade strains
The European Bank for Reconstruction and Development lowered its 2026 growth projection to 2.5% and raised the 2027 forecast to 4.0% as drought, higher energy costs and Black Sea trade disruptions tighten regional economies.
In its latest Regional Economic Prospects report titled “Running dry,” the EBRD cut its 2026 growth estimate to 2.5%, down 0.6 points from June, and lifted the 2027 outlook to 4.0%, up 0.4 points. Chief economist Beata Javorcik highlighted a confluence of challenges: drought affecting central Europe and the Baltic states, higher energy and food prices, and a severe disruption of Black Sea shipping that has halved Ukraine’s grain and oilseed exports in August.
Natural-gas prices in Europe have surged over 70% since February, while global LNG exports fell 40% after attacks on Middle-Eastern infrastructure. The bank warned that tighter financing conditions, rising fertilizer costs and a shift from a savings glut to fierce competition for funds—driven by AI-related investment—are straining both public and private sectors across its 40-plus economies.
Why it matters
The revised forecasts signal tougher economic conditions for 40+ countries reliant on EBRD support, affecting investment, trade and inflation.
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