EBRD Warns Tariffs, Chinese Competition Could Slow South-East Europe’s Growth

Members of the United States delegation to the United Nation's General Assembly (UNGA), including (L-R) White House Chief of Staff Susie Wiles, Special Envoy to the Middle East Steve Witkoff, Energy Secretary Chris Wright, Treasury Secretary Scott Bessent, Secretary of State Marco Rubio, UN Ambassador Mike Waltz, Tiffany Trump, her husband Michael Boulos and his father White House senior advisor Massad Boulos listen as U.S. President Donald Trump as he addresses the 80th session of the General Assembly at the United Nations headquarters on September 23, 2025 in New York City. (Photo by CHIP SOMODEVILLA / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)

The European Bank for Reconstruction and Development (EBRD) has warned that South-East Europe’s economy will come under pressure next year from U.S. tariffs, rising Chinese competition, and tight government budgets.

In its latest outlook released Thursday, the bank slightly downgraded its 2026 growth forecast across all its regions, which now for the first time includes some sub-Saharan African nations. However, it revised upward its projections for 2025.

EBRD chief economist Beata Javorcik said access to the U.S. market remains the “first pressure point” for economies in the region. The bank now expects overall growth across its investment regions to hit 3.1% in 2025, up from its May forecast of 3.0%. But growth is seen slowing to 3.3% in 2026—lower than previously expected—dragged down largely by Romania and the Balkans.

Founded in 1991 to help former Soviet bloc states transition to free-market economies, the EBRD has since expanded into the Middle East and North Africa.

Its outlook also flagged mounting risks for Ukraine, projecting GDP growth of just 2.5% this year, down from a previous forecast of 3.3%, as the war with Russia continues to weigh heavily on the economy. Russia’s GDP forecast for 2025 was also revised down to 1.3%.

“Ukraine’s economic outlook is highly uncertain, depending on the course of the war, energy security, and continued international support,” the bank cautioned.

The EBRD noted that exports from its member countries to the U.S. rose sharply in early 2025 as firms rushed to beat incoming tariffs announced by President Donald Trump. However, shipments slowed in the second quarter, revealing wide differences among countries. Kazakhstan, for example, boosted sales of gold and silver bullion to the U.S., while Hungary saw gains in pharmaceuticals and computer exports.

Beyond tariffs, the institution highlighted structural challenges: stiffer Chinese competition in global markets and shrinking fiscal space in government budgets.