Increased energy prices will accumulate more price the pressure on consumers in Emerging Europe, Central Asia and north Africa, European Bank for The European Bank for Reconstruction and Development warned on Wednesday while also trim year 2023 growth Climate forecast for The region.
The bank keep it up for growth for Turkey, the biggest beneficiary of EBRD funds, for 2023, after being promoted view for this is year.
inflation in European Bank for Reconstruction and Development regioncovering about 40 economies stretching from Kazakhstan to Hungary and Tunisia, averaged of 16.5% in July, level last I have seen in 1998, based on The bank’s latest Regional Economic Prospects Report.
gas prices in Europe works 2.5 times higher comparison with Mid 2021 levels reduced Supplies from Russia and some disturbances in Shipments from Ukraine. Inflationary pressures are expected to increase with Producer prices are going forward of consumer prices.
‘Families are still not faced The full Bezel (of) the influence of Energy costs are rising, European Bank for Reconstruction and Development chief economist Beata Javorcic told Reuters that governments are easing the burden. “More pain is coming.”
Poland, Croatia and Montenegro some of The countries Implement energy subsidies ranging from tax cuts to one-off Payments to mitigate the impact of Russia’s war in Ukraine on energy prices.
Gas consumption will need To be ‘sharply reduced’ in The short term, if supplies from Russia to Europe are completely cut off offalthough the EBRD bankThe base case scenario has been formulated on ‘Big turmoil’.
While food was an important inflation driver in European Bank for Reconstruction and Development regionJavorcik did not expect this spark social turmoil, indicating the return of wheat prices to their levels last Seen before Russia invaded Ukraine on February 24, based on the report.
regional growth lose strength
The bank Estimated economies via region will grow 2.3% in 2022 – 120 base points Higher than its forecast for May – thanks to stronger first half of The year When households spent savings accumulated during the COVID-19 lockdowns despite the fall in real wages.
“it is not secret those penalties on “Energy hasn’t been that efficient,” said the chief economist.
Ukraine’s GDP was expected to shrink by 30% in 2022, unchanged from the EBRD’s previous estimate, before growing by 8% in 2023. The bank It was in May predict a 25% stronger recovery for next year.
Russians economy he is set to shrink 5% instead of Expect 10% earlier. Penalties-hit economy shrink by 3% next yearlowered from zero growth.
“in generalWe believe the sanctions will continue forward” added Javorcik.
Until now bank remains Bearing in mind that many EBRD countries rely “to a large extent” on Gas for their energy needs.
“This is very disturbing times for “The EBRD regions and many advanced economies,” Javorcic told AFP (AFP). “As we are head Towards an economic winter cost of Russia’s war against Ukraine became clearer with every day passes. “
Pushing down Russian gas supplies bank to shrink 2023 growth Forecast to 3% of previous forecast of 4.7%.
Negative factors related to high energy prices, Ukraine war, inflation and expected slowdown in Western Europe, make horizons for next year Javorcik said.
The report indicated that 88% of central banks in European Bank for Reconstruction and Development region Raising interest rates between May 2021 and July 2022.
Javorcik said, “Some rooms for Highs may be left” in In response to inflationary pressures, but much will stop on uncertainty over Energy supply and economic slowdown already in place.
Inflation may not have reached its peak in EBRD Regions in many countries the increase in Product costs and rising natural gas prices have not yet fully reversed in Consumer prices,” Javorcik noted.
Analysts increasingly expect a global Recession for 2023 with the rise of central banks up Interest rates to cool decades of high inflation.
more powerful pace in Turkey
Global deflation risks such as geopolitical tensions and strong monetary tightening in developed countries also risk affect Turkey growthsaid the European Bank for Reconstruction and Development.
Updated 2022 growth Climate forecast for Turkey to 4.5% from 2% for 2022 on The back of a more More powerful than expected demand and humble recovery in exports.
The economy Expanded 7.6% better than expected year-over-year in The second quarter on strong local demand and exports. The rate made Turkey second- Fastest growth economy in The G-20.
Estimated by the European Bank for Reconstruction and Development for next year’s growth Confirmed at 3.5%, driven by family and public spending in the future of planned elections.
The report highlighted Turkish banks one of The economy strengths as they are remain well capitalized with NPL ratio of below 3%.
While economic activity remained relatively strong, the report said the decline in the Turkish lira and high inflation remain key Weak points.
Turkey’s annual inflation rate rises to 80% in August 24 new year high.
breadth current Account deficit and short-term external debtwhich she said is $180 billion, also remain big fears in terms of reserves that currently It stands at about $15 billion.
Turkey remains one of The bank’s largest market, with more More than $16.8 billion invested in over 380 projects mostly in The private section.
was established in 1991 to help former soviet bloc countries switch to free-market Since then, the European Bank for Reconstruction and Development has been extended Access to countries in Middle East and North Africa.
