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EBRD: Output in the EBRD regions is expected to grow by 4.2 percent in 2021

29 June 2021 13:28 (UTC +04:00)

Output in the European Bank for Reconstruction and Development regions is expected to grow by 4.2 percent in 2021 (up from 3.6 percent expected in September 2020), as social distancing is being phased out, commodity exporters benefit from higher prices, and manufacturing exporters gain from a temporary shift towards manufacturing as services remain depressed, while economies dependent on tourism continue to lose out, APA-Economics reports citing "Regional Economic Prospects in the EBRD Regions" report.

"In recent months, a recovery has been gathering pace. The health situation appears to be improving, vaccination is progressing and the average mobility of people in the EBRD regions (measured as trips to work, places of retail and recreation, transit stations and groceries and pharmacies) has returned to its pre-pandemic level. Industrial production and retail sales have largely recovered," noted in the document.

According to EBRD, growth is projected to moderate slightly, to 3.9 percent, in 2022. Forecasts are highly sensitive to the path of Covid-19 infections, assumptions relating to government policies and the effectiveness of policy actions to limit persistent economic damage.

"The outlook has also been revised up for economies in Central Asia, though the recovery is far from uniform. The region is expected to grow by 4.5 percent in 2021 and 2022, reflecting higher commodity prices, which benefit commodity exporters, as well as recovering remittances.

Industrial production and manufacturing exports have rebounded and services are recovering in central Europe and the Baltic states. Output is expected to increase by 4.8 percent in 2021 and 4.6 percent in 2022, reflecting strong household consumption and investment, and supported by EU recovery funds.

Economies in eastern Europe and the Caucasus are expected to grow by 2.8 percent in 2021 and 3 percent in 2022 as lockdowns are lifted and demand for exports remains strong. Higher commodity prices support the recovery in commodity exporters.

GDP in the south-eastern European Union is expected to grow by 5.2 percent in 2021 and 5 percent in 2022 as fiscal support and the prospects of major EU recovery funding in the coming years are boosting investor and consumer confidence. However, continued uncertainty around tourism weighs on the outlook.

Output in the Western Balkans is expected to grow by 5.1 per cent in 2021, reflecting strong outturns in the year so far and sustained fiscal stimulus. However, continued uncertainty around travel restrictions weighs on the outlook for tourism-dependent economies. Growth is expected to moderate to 3.8 per cent in 2022," noted in the report.