LONDON (Reuters) - The European Bank for Reconstruction and Development (EBRD) trimmed its growth forecast for its near-40 country region on Wednesday, citing a slowdown in global trade as well as the sharp economic deceleration in Turkey.
The EBRD, which tracks trends in 37 countries across three continents from Morocco to Mongolia, said in its latest economic outlook it expected average growth in 2019 of 2.3 percent - a 0.3 percentage point cut from its November prediction and a slowdown from the 3.4 percent expansion in 2018.
Growth is forecast to recover in 2020 to 2.6 percent, the bank said, noting however that the outlook is still clouded by risks such as trade tensions between the United States and its major trading partners.
“A widespread escalation of global protectionism remains a major concern,” the EBRD wrote in its report.
“The modalities of Brexit are still unclear, and global uncertainty remains high. The security situation in the Middle East and geopolitical tensions are also key sources of risk for the regions’ economies.”
Turkey is expected to see its economy contract by one percent this year, before a gradual recovery that should see 2020 growth come in at around 2.5 percent, the EBRD added.
“The lira’s depreciation and high interest rates will continue to dampen consumption and investment, although net exports should make a positive contribution to growth.”
Set up by governments in the early 1990s to invest in the ex-Communist economies of eastern Europe, the EBRD has expanded its mandate in the last decade.
Reporting by Karin Strohecker; Editing by Frances Kerry