Business
EBRD Lowers 2025 Growth Forecast Amid Trade Uncertainty and Slowing Investment
The European Bank for Reconstruction and Development (EBRD) has lowered its 2025 growth forecast for its economies to 3.2%, a 0.3 percentage point decrease from its September 2024 projection. The revision comes amid weaker external demand, slowing investment, and rising trade uncertainties, with the Bank warning that US trade tariffs could further impact growth.
Global Headwinds Affecting Growth
In its latest report released on Thursday, the EBRD cited geopolitical tensions, trade disruptions, and inflationary pressures as key challenges for economies within its regions, which span Central and Eastern Europe, the Caucasus, Central Asia, and the Southern and Eastern Mediterranean.
Despite inflation easing from its 2022 peak, fiscal imbalances and trade-related uncertainties are contributing to a cautious economic outlook. The Bank highlighted that weaker-than-expected recoveries in Central Europe, the Baltic states, and Southeastern European countries have negatively impacted manufacturing, exports, and investment.
Regional Growth Revisions
The EBRD’s forecast has been revised downward for most of its economies:
- Central Europe and the Baltic states: Growth now projected at 2.7%, down 0.5 percentage points, due to weak industrial activity and slower export recovery.
- Southeastern EU economies: Expected growth of 2.1%, a sharp 0.6-point downgrade, as investment remains subdued.
- Western Balkans: Minor downward revision to 3.6%, down 0.1 points.
- Central Asia: Still the fastest-growing region at 5.7%, though down 0.2 points, with Kazakhstan and Uzbekistan experiencing slower activity. Kyrgyzstan and Tajikistan are leading with 7% growth.
- Eastern Europe and the Caucasus: Growth outlook cut by 0.5 points to 3.6%, as the post-pandemic trade boom fades.
- Southern and Eastern Mediterranean: Weighed down by geopolitical instability and sluggish reforms, now projected at 3.7%, down 0.2 points.
- Turkey: No change to its 3.0% growth projection for 2025, but recovery to 3.5% is expected in 2026 as inflation eases and real wages rise.
Trade Tariffs Could Reshape Investment Flows
Trade uncertainty remains a significant risk. The EBRD estimates that a 10 percentage point increase in US tariffs on all imports could shave 0.1% to 0.2% off GDP in EBRD regions.
Countries with strong trade ties to the US—such as Jordan, Slovakia, Hungary, and Lithuania—could experience economic strain, while Georgia, Albania, Egypt, and Bulgaria would be vulnerable to higher tariffs on steel and aluminum.
However, some economies could benefit from trade shifts. Countries like Uzbekistan, Vietnam, Mexico, the UAE, and Saudi Arabia are expected to attract rising foreign investment as companies look to bypass tariff barriers and restructure supply chains.
Inflation and Fiscal Challenges Persist
While inflation in EBRD regions has fallen to 5.9% as of December 2024, it remains above pre-pandemic levels. Chief Economist Beata Javorcik warned that despite easing price pressures, shifting inflation drivers and delays in global interest rate cuts are complicating economic recovery.
Additionally, fiscal challenges are growing. Government deficits remain high, and military spending has doubled over the past decade, rising from 1.8% of GDP in 2014 to 3.5% in 2023. Further increases are expected, placing additional strain on public finances.
“Fiscal policy and wage dynamics now play a much greater role, and the path ahead requires careful policy calibration to ensure a stable growth trajectory,” Javorcik said.
As global uncertainties continue, the EBRD advises governments to focus on structural reforms, investment stability, and strategic fiscal planning to maintain economic momentum in 2025.
Business
Kennedy Center to Close for Repairs After Judge Blocks Trump Naming Plan
Most of Washington’s Kennedy Center will close for renovations after its board voted Tuesday to shut the landmark performing arts venue, hours after a federal judge blocked another attempt to add President Donald Trump’s name to the building.
The decision followed a ruling by US District Judge Christopher Cooper, who said the Kennedy Center board could not install a memorial to Trump or change the institution’s name without approval from Congress. The judge had previously ordered Trump’s name removed after it was added to the building’s facade.
“Simply put, Defendants cannot install memorials for President Trump or anyone or anything else at the Kennedy Center without Congress’s blessing,” Cooper wrote in his latest ruling.
Trump has said the renovation work, for which Congress has allocated $257 million, will not proceed unless the courts allow the board to move forward with plans to recognize him on the building. He said the Justice Department would appeal Cooper’s decision.
The board, which Trump chairs after replacing members with his appointees, voted to close the venue as it faces extensive repair needs and financial difficulties. Trump participated in the board’s virtual meeting, where the dispute over the institution’s future produced tense exchanges with Rep. Joyce Beatty, an Ohio Democrat and ex-officio board member who has opposed efforts to add Trump’s name.
The Kennedy Center has argued that the building requires major work. A partial ceiling collapse in a main hallway earlier this month added to concerns about the condition of the facility. Reuters reported that the closure could last as long as two years.
The dispute over the building’s name began after Trump’s return to the White House. The board first added his name to the facade, but Cooper ruled in May that the change was unlawful because Congress had established the Kennedy Center as a memorial to President John F. Kennedy. Workers removed Trump’s name in June, leaving scaffolding and a tarp covering part of the facade.
In August, the board voted to add an inscription describing the center as restored and renovated by Trump and proposed renaming the plaza outside the venue. It also considered another inscription if the Trump Kennedy Center Fund raised $100 million. Cooper’s latest ruling blocked those plans.
The court dispute has coincided with financial problems at the institution. Court filings have described declining ticket sales and contributions, while several artists and organisations have canceled performances or moved activities elsewhere. The board has argued that Trump’s involvement and fundraising are important to the center’s financial future.
The Kennedy Center, which opened in 1971, hosts major performing arts organisations and events including the annual Kennedy Center Honors. Its future now depends on the renovation process, the court appeal and decisions over how the institution will be financed and managed.
Business
Brent Crude Climbs Above $108 as Hormuz Strike and Saudi Pipeline Shutdown Raise Supply Fears
Brent crude prices climbed above $108 a barrel on Monday as growing disruption around the Strait of Hormuz raised fresh concerns about global oil supplies.
Brent crude for October and November deliveries rose by more than 3% during morning trading, extending gains from the previous week when prices moved back above the $100 mark. US West Texas Intermediate crude for October delivery also advanced, rising about 2.3% to around $102 a barrel.
The latest increase followed Saudi Arabia’s announcement that its East-West oil pipeline had been temporarily shut after drone attacks. The pipeline transports crude across Saudi Arabia to ports on the Red Sea, providing an alternative route that allows exports to bypass the Strait of Hormuz.
The closure comes as shipping through the strategic waterway faces growing risks. An unnamed merchant vessel was struck in the strait on Sunday, killing one crew member and injuring three others, according to Iranian authorities.
Shipping conditions have changed significantly since the conflict began. Vessels are required to obtain permission from Iran to pass through the waterway, while Tehran is also considering a system for charging transit service fees. Ships that do not comply have faced attacks, while US forces have carried out periodic strikes along Iran’s coastline.
Diplomatic efforts to address the situation have also suffered a setback. Oman postponed planned talks between Iran and Gulf states concerning the future of the waterway, which is one of the world’s most important routes for seaborne oil shipments.
The disruption is already affecting fuel markets beyond the Gulf. In the United States, the national average price of diesel surpassed $6 a gallon on Friday for the first time, rising from about $5.85 a week earlier and roughly 60% above the $3.71 recorded a year ago.
US petrol prices have also reached record levels, averaging about $4.22 a gallon after rising over the Labor Day weekend.
President Donald Trump has blamed Ukraine for part of the diesel supply pressure, saying Ukrainian President Volodymyr Zelenskyy should stop targeting Russian diesel infrastructure. Ukraine has attacked more than 20 Russian refinery targets this summer, while Russia responded by banning diesel exports.
According to Lipow Oil Associates, Russia’s export restrictions have removed about 800,000 barrels per day of diesel supply, while disruptions linked to the Strait of Hormuz have affected around 1.2 million barrels per day.
The broader impact on crude supplies is even greater. Oil flows through the Strait of Hormuz have fallen from about 20 million barrels per day before the war to roughly 7 million. The conflicts have also disrupted refineries representing about 5 million barrels per day of capacity, adding to pressure on global fuel markets.
Business
Google Plans €13 Billion Investment in Finland Data Centres
Google is set to invest at least €13 billion in data centres and digital infrastructure in Finland over the next two years, marking the company’s largest single investment in Europe as it expands its capacity for artificial intelligence and other digital services.
The investment will support data centres and related infrastructure in the Finnish municipalities of Hamina, Kajaani, Muhos and Vaala. Google also plans to fund clean energy projects as well as initiatives focused on biodiversity, education, research and workforce development.
The company said the decision reflects Finland’s strong position in developing energy-efficient infrastructure for artificial intelligence. The new facilities will support a range of Google services, including its Gemini chatbot.
Construction is expected to take place during 2027 and 2028. Google estimates the investment could contribute around €3.6 billion annually to Finland’s gross domestic product and support more than 37,000 jobs. About 16,000 of those positions are expected to be linked directly to construction work.
Once construction is completed, Google expects its facilities and related economic activity to support around 7,000 jobs each year. These positions are expected to include technical and facility roles, equipment suppliers and workers in nearby shops, restaurants and other services.
Finnish Prime Minister Petteri Orpo welcomed the announcement, saying the investment demonstrated the country’s strengths and could generate benefits beyond the immediate spending.
“The value of the data economy extends far beyond direct investment into spurring innovation, research and development,” Orpo said. He added that closer cooperation with Google could produce long-term benefits for both sides.
Why Finland is attracting data centres
Finland’s climate and energy supply are major factors behind its appeal to technology companies. Data centres consume large amounts of electricity and produce substantial heat, making cooling a major operational cost.
The country’s cold climate can help reduce cooling requirements, while its energy system includes nuclear power, wind and hydropower. The combination of relatively stable electricity supplies and favourable conditions for cooling has encouraged a growing number of data centre projects across Finland.
Google has maintained a presence in the country since 2009, when it acquired a former paper mill in the coastal city of Hamina and converted the site into a data centre. The company has expanded the facility over the years.
The latest investment comes as Finland faces weak economic growth and record unemployment. For Orpo’s government, attracting major technology investments has become an important economic priority.
With the country’s data economy offering prospects for investment, employment and research, Google’s announcement is expected to strengthen Finland’s position as a major European hub for digital infrastructure and artificial intelligence.
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