US tariffs, Chinese competition & limited fiscal space keep EBRD economies ‘under pressure’

Uh let’s get to business. Sean Pelgrang’s here. He was giggling through that as well. You got a special guest today, haven’t you? Yet another classic transition from you. Thank you so much. Making so much easier as I go in much drier top here. The eur topic here. The European Bank for Reconstruction and Development, the Multilateral Development Investment Bank, um has historically operated in Central and Eastern Europe, but now covers three continents. And they’ve released their latest growth projections this Thursday. Okay, so let’s take a look at them. Uh, now on that graphic we’ll have you pull up across all regions. Uh, they’re seeing growth of 3.1% this year and 3.3% next year. This is a slight upward revision for 2025 and a slight downward revision for 2026. Uh key hurdles facing the EBRDS economies are among other things impacts of US tariffs, increased competition from China and export markets and more restricted fiscal space. We’ll discuss all of this and more with the EBRD’s chief economist, Biata Yavoric. She’s joining us live from London. Bata, thank you so much for being with us. Thank you for having me. Well, let’s uh begin with US tariffs. Trump’s global trade war is often described as completely overhauling the international trade system. But what impact are you seeing on the EBRD regions? Well, we have seen that so far in the first half of the year, countries in our regions have actually increased exports to the US. But of course, the performance has been uneven. On the one hand, we have Kazakhstan that exported more of silver and gold bullion bars. Hungary exporting more computers and pharmaceuticals. But at the other end of the spectrum, Slovenia saw a huge drop over a million dollars less of exports of pharmaceuticals. But of course, this increase in exports has been driven by frontloading. These exports went to the US before tariffs came into effect. So going forward, we expect tariffs having a dampening impact on exports from the region. Now in parallel to this we’re also seeing the impact of Chinese competition in manufacturing exports that’s intensifying. Tell us more. Most of the debate about China has focused on whether we are going to see China dumping their products on the European market. What we are drawing attention to in our report is the fact that China is increasingly competing with u Eastern European EU member states as well as Germany and France. The exports from China are becoming more similar to what these countries are exporting to the world. So in the medium term we are going to see more and more pressure from competition from China in third markets. Uh now I also want to focus on a different area here. The BRD now also covers six new economies in subsaharan Africa, Ghana and the Ivory Coast to mention too. What are you seeing there in terms of growth? We are seeing a strong growth driven mostly by commodity exports. So gold in Ghana, petroleum in Nigeria. uh but we are also seeing uh increase in inflation or or relatively high inflation in these countries. Um though on the positive side there have been some upgrades to uh debt ratings. Now the debt in these countries has grown over the last decade as it was the case for other economies and by now the costs of debt servicing are becoming quite a substantial item in government budgets. So that yeah the the debt repayments increasingly taking up a more fiscal space for these countries. Uh and let’s end now with a focus on on Ukraine. Ro approaching the 4-year anniversary of the fullscale invasion in 2022. How is its economy holding up today? The situation in Ukraine is challenging. Um to the credit um the authorities have managed to maintain macroeconomic stability throughout the war. Um that was in part thanks to financing from the EU from G7 from the IM from the IMF and of course the EBRD has done its part having deployed 8.4 billion euros to Ukraine. But for firms the situation is challenging. they are facing labor shortages. Um harvest this year um has been weaker due to weather, due to activity on the battlefield. Um and of course you know why in the summer firms have not been reporting shortages of electricity um going forward if bombing continues uh such shortages may take place. A long winter ahead for Ukraine. Bata Yavoric, you are the chief economist of the European Bank for Reconstruction and Development. Thank you for speaking with us on France 24. Thank you for having me, Charles. Well, back to you, Stuart, after this overview of uh of uh the economies of over three continents. Exactly. We know exactly what’s going to happen now, Shan. Thanks very much, Shaw. ping around there with the business on France

The European Bank for Reconstruction and Development (EBRD) released its latest growth projections this Thursday, outlining the challenges facing the economies in which the development bank operates. From the impact of US tariffs, to intensifying Chinese competition on exports by way of Ukraine’s wartime economy and the fiscal troubles facing countries in sub-Saharan Africa, we discuss it all with the EBRD’s chief economist, Beata Javorcik.
##EBRD ##USTariffs ##China

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