The European Bank for Reconstruction and Development has reduced growth forecasts for twelve countries due to US tariff policy.
Countries in Eastern Europe can be one of the largest victims of US trading policy. This is stated in the European Bank’s updated forecast for Reconstruction and Development (EBRD), Report RBC-Ukraine On Tuesday, May 13.
The United States introduced 25% of the duties for imports of steel, aluminum and cars, as well as 10% of the duties for all goods from the European Union. It is especially hit in Slovakia and Hungary – EBRR estimates losses for their economies at 0.8% and 0.4% of GDP, respectively. In the case of Slovakia, 83% of this influence falls into the car industry, in Hungary – 41%.
Against this background, the bank reduced the GDP growth forecasting in both countries by 2025: up to 1.4% in Slovakia and 1.5% in Hungary. In sum, forecasts for 27 economies have been modified in the direction of reducing forecasts, including Ukraine, Turkey, as well as the countries of Central Asia, the Middle East and Africa. The total forecast for the region is adjusted from 3.2% to 3%.
“Tariff Chaos has not left a single country unnecessary,” Ebrr Beata Yavorchik’s chief economist said in a commentary Bloomberg. According to him, the negative impact acts not only directly, but also by the influence on the major economies, in particular Germany, and the potential slowing down China’s growth.
The EBRD has added that the negative consequences of high tariffs and total trade uncertainty may spread to countries with limited direct exports in the United States.
Separately, the report mentioned the political factors. Hungarian prime minister Viktor Orban, called Donald Trump’s ally in Europe, followed the right ideology and maintains a friendly relationship with Moscow. His government is also at risk for losses due to the intensity of the foreign economy.
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Source: korrespondent
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