EBRD raises growth forecast for regional economies

The European Bank for Reconstruction and Development (EBRD) raised its growth forecast for its 38 economies, stating the economic recovery has beengathering steam. However, “dark clouds” will still cover the economic outlook in many countries as the Delta variant of the SARS-CoV-2 virus first detected in India continues to spread rapidly.

The European Bank for Reconstruction and Development
The European Bank for Reconstruction and Development

The EBRD, which covers economic trends across Europe, Asia and Africa, expects region-wide growth this year of 4.2% compared to its September forecast of 3.6%, it said in a report. This follows a contraction of 2.3% last year. South-eastern Europe and the Western Balkans enjoyed the biggest upward revisions, with nearly 2 percentage points added.

That positive change is attributed to the fact that over the past time, many countries have accelerated the campaign to cover the COVID-19 vaccine, and gradually removed social distancing measures. Accordingly, “knots” of the economies have been removed, creating a driving force for growth in all industries and fields.

The recent surge in commodity demand and prices for a variety of commodities has significantly boosted the export sector of many emerging economies. EBRD experts affirmed that, compared to 2020, the economic picture of countries is now much brighter.

However, despite these optimistic forecasts, challenges to the global economy in general, and the economies in which EBRD invests in particular, remain serious as the Delta variant continues to spread rapidly.

The Central Statistics Office of India has recently forecasted that the Indian economy will shrink by 7.3% in the fiscal year 2020-2021. In some Southeast Asian countries such as Malaysia, Thailand, Myanmar and the Philippines, the resurgence of the COVID-19 pandemic is also derailing economic goals. In the Philippines alone, GDP shrank by 4.2% in the first quarter of 2021, falling below experts' estimates and marking the fifth consecutive quarter of decline.

The reality of anti-epidemic situation and economic recovery over the past time in the world shows that vaccination against COVID-19 is the most effective solution to promote global growth in the short term.

It is estimated that accelerating the vaccination campaign can facilitate the recovery of economic activities, thereby bringing the world economy about US$9 trillion by 2025. Therefore, the COVID-19 vaccine is the “key” to help countries cope with the above economic challenges. Accordingly, governments and international organisations need to quickly remove the main bottlenecks in global vaccine production and supply, without leaving any country or region behind in the fight against COVID-19.