The European Bank for Reconstruction and Development (EBRD) revised downwards is forecasts for 2020-2021 GDP dynamics in the countries of its presence because of the COVID-19 pandemic
LONDON (Pakistan Point News / Sputnik - 01st October, 2020) The European Bank for Reconstruction and Development (EBRD) revised downwards is forecasts for 2020-2021 GDP dynamics in the countries of its presence because of the COVID-19 pandemic.
The financial institution said in its fresh report that it expects the GDP in the countries of its presence to decline by 3.9 percent in 2020 (compared to 3.5 percent in the previous report) and to grow by 3.6 percent the next year (compared to 4.8 percent in the previous report).
The EBRD explained it was revising its forecasts chiefly due to the fact that the COVID-19-related restrictions were in place during a longer period than expected.
"Output in the EBRD regions contracted sharply in the second quarter of 2020 by around 8.2 per cent year on year. In many economies the contraction was larger than declines seen during the global financial crisis. The speed of recovery is expected to be similar to the one observed in the aftermath of that crisis, with pre-pandemic levels of GDP returning towards the end of 2021," EBRD Chief Economist Beata Javorcik said.
According to the EBRD, measures introduced for containing the pandemic result in declining demand and supply amid external shocks, such as "low commodity prices, weak demand for exports, a collapse in tourism and drops in remittances."
The EBRD qualified tourism as the most affected sector, which would be long suffering from the negative consequences of the coronavirus. Therefore, the countries that largely depend on tourism � Albania, Greece, Cyprus, Croatia and Montenegro � will see the sharpest economy decline, according to the EBRD.
