Economy 26 February 2026, 9:37am

On Thursday, the London-based financial institution, which was founded in 1991 to finance the transformation of Central and Eastern European economies, presented its first comprehensive 55-page regional forecast for this year.

The European Bank for Reconstruction and Development (EBRD) expects growth across its regions to pick up from an estimated 3.4% in 2025 to 3.6% in 2026 and 3.7% in 2027, according to its latest Regional Economic Prospects report. The forecast represents a 0.2 percentage point upward revision for 2026 relative to the outlook published in September 2025.

"Entitled Resilient growth amid continued trade tensions, the new report shows that while geopolitical frictions and trade disputes remain significant, their impact on global trade has so far been less pronounced than previously anticipated. Rapid adjustments to global supply chains and rising demand for artificial intelligence (AI)-related products have helped sustain economic momentum across many EBRD economies.

However, the full impact of US tariffs may not have been felt yet, as US imports were frontloaded earlier in 2025 in anticipation of tariff increases,

the EBRD said.

Trade tensions between China and the United States of America continued to intensify in 2025, leading to a further decline in bilateral trade between the two economies. At the same time, both China’s total exports and exports from most economies in the EBRD regions increased relative to 2024. The United States substituted some imports previously sourced from China with imports from other economies, including selected products from the EBRD regions.

While the overall role of the EBRD economies in this reallocation remained limited, exports of precious metals, computers, phones, chocolate and several other product categories to the United States rose significantly as China’s exports of those products declined. Meanwhile, exports from China to the EBRD regions also rose, reflecting expanded production capacity and strong price competitiveness.

Overall, however, the impact on trade in the EBRD region was limited. According to the EBRD report, between January and October last year, the value of US imports from China fell by 27% year-on-year, while US imports from other markets rose by 12.6%. Total US exports to the EBRD region grew by only 0.3% compared to the same period a year earlier.

According to calculations by a London-based financial institution, US import tariffs increased the average effective tariff on US exports to the EBRD region by 5.2 percentage points, bringing it to 6.6% between January and November last year.

The new EBRD forecast presented on Thursday projects average economic growth of 2.9% in 2026 and 2.7% in 2027 for nine Central and Baltic EU economies: Hungary, the Czech Republic, Slovakia, Poland, Slovenia, Croatia, Latvia, Lithuania and Estonia. This year's forecast is 0.2 percentage points higher than the EBRD's previous estimate for the region.

The bank emphasises that the main reasons for revising its growth forecast upwards for this group of countries include

a slight improvement in the outlook for the German economy and an expected increase in investment.

The EBRD expects the Hungarian economy to grow by 2% this year and 2.5% next year, following last year's GDP growth of 0.4%, as estimated by the bank.

"Investment is expected to rebound gradually as external demand improves and new automotive and battery manufacturing capacity comes on stream including CATL's €7.3 billion battery gigafactory near Debrecen, which is set to begin production in early 2026," the EBRD said.

Risks are tilted to the downside, linked to external demand weakness and prolonged uncertainty over EU funding.

The EBRD expects economic growth of 2.5% in Ukraine this year, provided that the war continues throughout the year. However, the bank predicts that the Ukrainian economy could grow by 4% next year if the war ends by then.

In 2025, the London-based financial institution provided Ukraine with €2.9 billion in loans and investments, setting an annual record.

Since the start of the war, the EBRD has mobilised over €9.1 billion in financing for programmes in Ukraine from its own resources and in collaboration with co-financing partners.

In December 2023, the EBRD's Board of Governors approved a €4 billion capital increase requested by the Board of Directors in order to continue supporting Ukraine. This brings the EBRD's paid-in capital to €34 billion.

According to a recent announcement by the bank, shareholders have subscribed to almost 95% of the increase.

Cover image (for illustration purposes only): Getty Images