EBRD sees moderate pick-up in region's growth, cautious on global backdrop
- Author: Leroy Wright May 12, 2017,
May 12, 2017, 6:11
The London-based EBRD rejected a challenge by Moscow over the suspension of new investments in Russian Federation that the development bank announced in 2014 as part of European action against Moscow over the Ukraine conflict.
The European Bank for Reconstruction and Development (EBRD) has forecasted a two-percent growth of Azerbaijan's economy in 2018, according to the EBRD's updated Regional Economic Prospects report.
Major risks across regionThe report said the latest forecasts were subject to major risks related to geopolitical tensions in and around the EBRD region, set against a backdrop of increased political uncertainty.
"Net exports also had a positive contribution to growth (although small), mostly because of a good performance of services exports, such as tourism", the lender said.
The bank's President Suma Chakrabarti added the decision was "final and binding" and that there had been no discussion by the bank's decisionmakers on what it would require for the bank to restart investments in Russian Federation. "We saw the EBRD became a tool of foreign policy and not a fair and open institution", he said.
"That is a final and binding resolution".
The EBRD was established in 1991 with the goal of supporting market economies and promoting the private sector.
At the same time, the EBRD forecasts growth of the Ukrainian economy by 2%. The main driver of the economic growth during this period was the private consumption, amid more disposable income (supported by Value-Added Tax and wage increases), improved labour market and low inflation.
"This year's economic growth in Serbia will be lower than the average for the region of South East Europe of 3.1 percent, and lower than growth in Montenegro, Albania and Kosovo", EBRD said. Weak consumption and investment following the attempted military coup in July 2016 compounded these earlier problems.
The bank announced that its board of governors had given the green light for it to engage in the West Bank and the Gaza Strip for an initial period of five years to support the Palestinian territories with investments through a trust fund.