EBRD cites oil price as it cuts Russia outlook

City A.M. Reporter
THE EUROPEAN Bank for Reconstruction and Development (EBRD) cut its 2013 and 2014 growth forecasts for central and eastern Europe and North Africa yesterday, citing weak external demand and unfinished structural reforms.

The EBRD’s forecasts for its regions of operation included a drop of half a percentage point for the biggest economy, Russia.

“Potential growth will continue to be weak in the absence of reforms, low investment and high structural unemployment that is eroding skills,” chief economist Erik Berglof said.

The EBRD cut its 2013 forecast for central and eastern Europe to two per cent from 2.1 per cent, and dropped its 2014 projection to 2.8 per cent from 3.1 per cent.

It cut its 2013 forecast for Russia to 1.3 from 1.8 per cent, and for 2014 to 2.5 from three per cent, citing subdued investment and a drop in the price of oil.