Russia still growing, war in Gaza weighs on neighboring countries, says EBRD | TV5MONDE

Russia still growing, war in Gaza weighs on neighboring countries, says EBRD | TV5MONDE
Russia still growing, war in Gaza weighs on neighboring countries, says EBRD | TV5MONDE

The Russian economy has proven more resilient than expected and will continue to grow this year despite Western sanctions, while the war in Gaza weighs on countries in the region, according to new EBRD forecasts released on Wednesday.

The European Bank for Reconstruction and Development (EBRD), which is holding its annual meeting in Yerevan, Armenia until Thursday, has published new growth forecasts for all the regions it covers.

“I think it was unrealistic to expect that sanctions against Russia would lead to a deep economic and financial crisis, as many hoped,” Beata Javorcik, chief economist of the Berd.

Russia, which saw economic growth of 3.6% last year, is expected to record a 2.5% increase in gross domestic product (GDP) this year, 1.5 points more than forecast in September , according to the latest EBRD projections. The Russian economy is now back above pre-war levels in Ukraine.

The country has “refocused its economy on the war effort. This therefore leads to faster growth”, but does this “result in an improvement in the well-being of its population? We can doubt it”, estimated Ms. Javorcik.

According to the EBRD, the sanctions have limited technology imports from Russia and add to the departure of multinationals and the exodus of a qualified workforce. “Russian growth in the medium term will be lower than it would have been in the absence of sanctions,” the economist stressed.

The EBRD also covers southern and eastern Mediterranean countries. While the area’s economy is expected to grow this year, it will be less than expected, due to delays in major public investment projects in Egypt and because of the war in Gaza.

“The negative effects of the conflict on tourism in Jordan and Lebanon could prove lasting,” notes the institution in a press release.

Egypt, for its part, experienced a sharp drop in its revenues from Suez Canal fees, penalized by attacks by Yemeni Houthi rebels against ships to denounce the Israeli war in Gaza.

Furthermore, despite the resumption of Nagorno-Karabakh by Azerbaijan in September, the cause of the massive arrival of refugees, Armenia sees its growth forecasts improve significantly for this year, to 6.2%. .

“The (Armenian) government contributed to the integration of Karabakh refugees through public spending” and “this also stimulated the economy,” explained Ms. Javorcik.

The EBRD said on Wednesday it expects growth of 3% across all its regions this year, slightly below its previous projections.



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