EBRD Downgrades Growth Forecast Again Amid War and Energy Price Pressures

The European Bank for Reconstruction and Development (EBRD) has cut its growth forecast for 2026 to 2.5%, marking its second consecutive downgrade due to ongoing war, higher energy prices, and borrowing costs.

The EBRD covers 41 economies, with the sharpest downgrades in Iraq and Lebanon. Iraq's economy is expected to contract by 12% due to the closure of the Strait of Hormuz, while Lebanon's economy will shrink by 5% as the conflict with Israel weighs on economic activity.

Global wheat prices have risen about 30% since February, adding pressure to economies such as Egypt. The disruption in Ukrainian exports could cut Ukraine's wheat and metal exports by around $5.5 billion this year, equivalent to 2.5% of GDP.

Meanwhile, Japan's Nikkei rose 1.33% after Meta Platforms unveiled its new handheld device featuring the Muse AI assistant, boosting chip-related shares such as Ibiden and Advantest.