European development bank downgrades growth forecast amid Middle East tensions

The European Bank for Reconstruction and Development (EBRD) has tempered its economic outlook for the coming years, warning that regional growth momentum is losing steam as geopolitical conflicts disrupt international commerce and investment flows.

In its latest assessment, the multilateral development institution revised downward its growth expectations across the regions it serves, which span Eastern Europe, Central Asia, and the Middle East. The slowdown reflects mounting concerns over the impact of regional conflicts on export-dependent economies, particularly those reliant on energy and commodity trade.

The war dynamics affecting countries like Iraq have emerged as a significant headwind for economic activity. Trade disruptions, heightened security concerns, and reduced investor confidence are weighing on business sentiment across multiple economies within the EBRD's operational mandate.

The revised forecasts underscore growing economic headwinds facing emerging markets in the bank's regions as global supply chains face renewed pressure and geopolitical risks continue to cloud the investment landscape. The EBRD's assessment reflects broader trends across developing economies struggling with external shocks and structural challenges.