Tariffs and global growth (with Francine Lacqua)

New US tariffs may not have full impact yet due to frontloading; emerging Europe less affected directly. Middle East conflict adds inflationary pressures via energy and food prices, with fiscal risks for North African countries.

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European Bank for Reconstruction and Development (EBRD) 7.0
Commercial Bank
Beata Javorcik 7.5

Tariffs and global growth (with Francine Lacqua)

wti

High oil prices helping Russian revenue; Middle East conflict adding inflationary pressures via energy.

yields

Inflationary pressures from energy and food will keep yields elevated.

Trump proposing new tariffs of at least 10% on imports from 16 trading partners.

Francine Lacqua
Beata Javorcik

Impact depends on whether tariffs stick or are negotiation invitations; frontloading last year muted impact.

For emerging Europe, US is not important market; primary effect via German economy and supply chains.
Beata Javorcik

Retaliation unlikely; protectionism is never helpful ex post.
Beata Javorcik

Middle East conflict adds inflationary pressures via energy and food prices; energy-intensive industries already declined since 2022.

Countries like Hungary, Poland, Czech Republic affected.
Beata Javorcik

Inflation in EBRD regions will be hurt after summer; disinflation interrupted by new pressures.

High fertilizer prices could lead to lower harvests and export restrictions, creating domino effect.
Beata Javorcik

North African countries hit more; food price increases pressure government coffers, debt servicing high (Egypt 80%).

Fiscal implications are significant beyond inflation.
Beata Javorcik

Russian economy slowing; weak manufacturing, labor shortages, but high oil prices help government revenue with delay.
Beata Javorcik

Ukraine finances reasonably comfortable with IMF/EU support; but Middle East conflict adds pressure via energy infrastructure destruction and price pressures.

Ukraine is net importer of hydrocarbons.

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