(MENAFN) The European Bank for Reconstruction and Development (EBRD) has revised its economic outlook for the region downward, cutting its 2025 forecast by 0.2 percentage points.

The adjustment brings the anticipated growth rate to 3 percent, citing escalating uncertainty surrounding global trade policies.

The update was presented in the bank’s Regional Economic Prospects report, which pointed to increased tariffs and unstable policy environments as key factors weakening trade flows and straining supply networks.

"This downward revision follows a similar 0.3 percentage point cut in February and reflects a confluence of global headwinds, as captured in the title of the new report, 'Uncertain times,'" the report said.

These negative influences stem from a notable surge in trade and economic policy unpredictability, declining international demand, and the broader repercussions of recently announced tariff hikes.

Beata Javorcik, the EBRD’s Chief Economist, remarked, “Although understanding the full macroeconomic effects of the newly announced tariffs will take time, it is already clear that our regions have entered a period of heightened uncertainty and slower growth.”

She emphasized the importance of mitigating trade frictions through “constructive dialogue” and building agreement among major policy influencers, warning that extended ambiguity in trade matters can inflict significant economic harm.

Despite the dimmer projection for 2025, the EBRD has maintained its 2026 growth estimate at 3.4 percent.

Among the economies within the bank's coverage, Slovakia is anticipated to suffer the most substantial direct GDP loss from new U.S. tariffs, with a projected decline of 0.8 percent, followed by Jordan at 0.6 percent and Hungary at 0.4 percent.

MENAFN13052025000045017167ID1109542039